Production Cost For Google Nexus 7 Tablet Is USD 184
When Google and Asus revealed the Google Nexus 7 at the end of last month, Google’s CEO Andy Rubin announced that the company is selling the tablet at a low cost. Well, that was not surprising at all because we don’t think that there are other devices available in the market that come running with Tegra 3 quad core CPU and have a price tag of mere $199. Of course the company that has made this tablet is already a very successful brand and that makes it pretty amazing deal. That’s not it, when you buy this highly affordable tablet, you will also get an extra $25 credit for the Google Play Store.
So, when we talk about the real cost of the device, we will be really interested to know that how much Google is really making in terms of profit from this tablet. Well, according to a recent tear down of the tablet, we have found out that the 8GB model of Google Nexus 7 tablet comes with the components that worth $184. Now, you have to keep in mind that the cost mentioned above is only the cost of the components used in the device, while we have not included the cost on research and development, advertising, assembly, marketing and other similar expenses. When talked about the Amazon Kindle Fire, the non production costs were around $16, which gives us a pretty good idea that Google is not getting anything from the 8GB model of the Nexus 7 tablet. Basically, you will be getting an amazing device at a very affordable price and the manufacturing company is not even getting a profit margin. Of course we know that Google will be able to cover that with the sales of digital content at the Google Play Store.
That’s not it, we also know that Google Nexus 7 also comes in the 16GB flavor. Now, the cost of adding a NAND chip of 16GB instead of the 8GB one will cost only $8 but Google is charging $50 more for the higher storage unit. So, we can say that the 16GB model of Nexus 7 will be able to generate a lot of profit margins for Google and Asus from the start. As we reported earlier, the 8GB model of Google Nexus 7 only comes with around 6GB of available storage memory, we think that more users will go for the 16GB model instead.