Google Nexus 7 Parts Cost $18 More than Kindle Fire
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The Nexus 7 tablet has generated a ton of buzz among people who are in love with budget tablets. The device may be going for $199 at this point but it has a lot of nice features. Many experts consider the Nexus 7 to be superior to the Kindle Fire in most areas. So is Google losing money on the Nexus 7 just like Amazon did with its Kindle Fire early on? According IHS iSuppli, Google’s new tablet costs $151.75 to make. The costs add up to $166.75 for the 16 GB model.
This means Google will make a modest profit selling the 16 GB Nexus 7 units. Google is offering more memory at a more profitable price point (something Apple has done in the past). The Kindle Fire used to cost Amazon a ton of money to make. But as IHS iSupplie suggests, the costs of manufacturing the tablet have dropped dramatically (to $139). So it is not surprising to hear rumors about Amazon’s alleged plan to offload its Kindle Fire 1 units for as low as $149.
Google’s Nexus 7 represents less of an attempt to compete with Apple Inc.’s market-leading iPad, and more of a bid to battle with Amazon’s Kindle Fire,
said Andrew Rassweiler, senior director, teardown services for IHS. That sounds just about right. But Amazon will be making a comeback with its upcoming Kindle Fire 2 tablet. It will be interesting to see how much those will cost to make.
