back to article Google makes money on Nexus 7... just

Google will not, it seems, be selling its low-cost Nexus 7 Android tablet at a loss, but it's making less money out of the hardware than Amazon is with the Kindle Fire. The cost of the two seven-inch tablets' components and how much the two firms pay to have them assembled sees Google cough up $159.25 (£103.08) for the 8GB Nexus …

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Additional costs

Have you got a breakdown anywhere of how iSuppli calculated the additional costs over manufacture per unit? Would be interesting to see how they worked it out from general product line costs (marketing, software, support, bulk shipping) and individual item costs (packaging, Play store credit [not real money of course but there must be a cost]).

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Re: Additional costs

some more figures here

http://www.isuppli.com/Teardowns/News/Pages/Low-End-Google-Nexus-7-Carries-$157-BOM-Teardown-Reveals.aspx

probably have to pay for any more info

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Thumb Up

Re: Additional costs

Thanks

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Re: Additional costs

Plus what about the cost to eBuyer etc ? (That sentence spoken to my nexus7 that arrived this morning came out as "post what about beer cost for a bike" 8-)

Its not just being sold direct by Google (who are charging for delivery) but also by online retailers like eBuyer (who are giving free next day delivery) so there must be something in the costings for their margin even if its razor thin.

My initial impression of nexus 7 is that Google is giving the iPad real competition both in hardware and software ... I'm hoping that means Apple will up its game because its GUI is looking extremely dated now.

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Ye Typo

"plus how much thy spend to promote the products"

Not normally one to pick these things out, but shouldn't it be:

"plus how much thy spend to promoteth thine products sire"

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Headmaster

Re: Ye Typo

:-)

But actually, not unless you want 'sire' to punish you for lack of respect. Thee, thy, thine etc. are the informal second person pronouns. In English we dropped these for the formal you and your in all circumstances, thus removing the chance of slighting your betters with informal pronouns. This being the case, it would never have been proper to refer to someone of the title 'sire' with thine

.

It seems to me, the reason that people make this mistake is threefold:

1) The constant usage of thee, thou etc. when referring to God in the King James bible - apparently this is because one always uses the informal when referring to God due to the personal relationship with him.

2) Poetic usage of the terms (especially in Shakespeare). Actually when used, they are either intimate relationships, or used deliberately to be offensive. The context is everything.

3) We aren't taught any of this stuff in school.

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Anonymous Coward

Re: Ye Typo

That's actually one of the most interesting posts I've seen here for quite a while, well done. (I didn't know any of it).

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Headmaster

Re: Ye Typo

3) We aren't taught any of this stuff in school.

But nonetheless, those of us who grew up in t'north some years ago still use thee and thou, thy and thine... and also occasionally the old 'st' endings: dost thou? Canst thou?

"Don't thee thou me lad; I'll tell thee when thee can thou me!"

Despite having a lot of Germans in the family, I still haven't fully worked out the rules for the grammatically similar 'du' and 'Sie'... but I do know that using 'du' to the wrong person can get them very upset. Safest to ask, I reckon.

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Re: Ye Typo

'Du' is informal, 'Sie' is formal. :)

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Re: Ye Typo

Well, yesssss... the question is to whom and under what circumstances one can be informal without causing upset.

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Re: Ye Typo

In France the same principal exists with Tu and Vous.

Tu = Informal ( When speaking to children , friends and usually parents).

Vous = Formal ( strangers, professionals, tutors, etc and sometime ones Parents).

There still remain times when it is uncertain but an unwritten principal goes along the lines of : When you have shared a meal together/got drunk together at least once, then you can begin to Tutoyer ( Use the Tu version).

Et voila....c'est tout

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IT Angle

Re: Ye Typo

Of course most of the UK don't use thee, thou, thine much if at all now (especially not in church) but in at least one geographic area it is still common, even the norm: the small isles of Orkney.

Conversations between 30/40/50 year olds can be a little like dropping back a hundred years linguistically - and that's without the increadible accent!

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Happy

Re: Ye Typo

"But nonetheless, those of us who grew up in t'north some years ago still use thee and thou, thy and thine... and also occasionally the old 'st' endings: dost thou? Canst thou?

"Don't thee thou me lad; I'll tell thee when thee can thou me!""

Aye lad, you tell 'em. I use all of those (old Yorkshire fart that I am) as well as hast (has thou - have you).

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But

It wouldn't surprise me if Google was given all the profit to Asus, the way they give their share of the Apps selling to carriers.

Their nexus line seems to be more about showing off what Android can do than making money and, like they do with the phones, Asus may well release a very similar tablet

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Re: But

The rumours suggest that ASUS break even on the deal and should be grateful for the opportunity from Google to have their brand share the limelight.

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Anonymous Coward

woo

Still a little shocked about the price/performance of the Nexus 7, it must be giving various manufacturers some food for thought.

"NO, this is how you do an Android tablet, you fops.."

Betting that Samsung and co will get the hint surprisingly quickly. I wonder if the iPad mini will own the 7 inch segment, or the Nexus will manage to secure a first mover advantage? (Obviously, most of the previous 7 inchers were too little for too much money, and were a bit "meh")

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Re: woo

But if asus is breaking even and google is basically screwing suppliers then it's not the right model and it's one that can't last. So in order for everyone to do it right prices will need to rise. Which is fine but people should be realistic.

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Re: woo

(Obviously, most of the previous 7 inchers were too little for too much money, and were a bit "meh

Having had a playbook for a little while now I wouldn't classify it as meh. Expensive when first launched but a bargin now.

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Anonymous Coward

cost of promotion and software?

the whole cost of promotion is a couple of leaks they released, to make the media, and "consumers" reach their climax and uhm... release the news for free.

the cost of software... like what, that jelly bean thing? I thought they're going to release it anyway? Unless it took them thousands of hours and dozens of (well-paid) google developers to "optimize" it for the nexus. Sorry, provide a unique experience, I'm reading from the wrong script.

but then, shipping from China to the US and Europe, local warehousing, some aftersales service, they do add some cost.

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Loss-leader

"Both Amazon and Google will be looking to make more money by encouraging tablet owners to buy content from them than they stand to make on the devices, but it's interesting that neither (yet) sees the hardware as a loss-leader."

If Google is breaking even when it sells the 8GB model direct (as it’s said is the case), then surely it’s going to make a loss when another retailer sells the same model? Similarly, how much profit is Google going to make when a retailer sells the 16GB one? As Google is not selling the Nexus 7 exclusively, then I suspect it is willing to sell it as a loss-leader to some extent.

On a slight tangent, I know a few people who have ordered one or will be, but all are going for the cheaper unit. I have no idea how this will compare to most punters, but the people I know seem to have been very much influenced by price in their decision.

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Anonymous Coward

Falling component prices

This is an important point as I think the Kindle Fire component prices had gone down by the time I got to the end of the article.

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WTF?

Why should consumers care?

So Google "only" makes a 25% mark-up on this gizmo, compared to Apple's outrageous 64% mark-up for the "Nu" iThingy.

Surely 25% is more than enough, and surely consumers should be more interested in reasonable prices than some faceless company's profits.

IOW, er... this is a good thing, innit? Or am I missing something obvious?

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Anonymous Coward

Re: Why should consumers care?

Yes, the old "Apple Tax" argument gets trotted out every so often. And, just as often, the Ford vs BMW retort comes back. However, whenever comparing the cost of something, one must always look at the Total Cost of Ownership (TCO) (and you should also look at Opportunity Cost).

Looking at Apple products through TCO-tinted glasses, and the picture starts to look a little different. Look at Apple resale values on eBay, which makes the upgrading to next year's model not nearly as painful as you'd think. This of course relies on Appley things holding their cachet, but that seems fairly likely over the next 12 months.

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Re: Why should consumers care?

To be fair apple's model doesn't require them to screw you out of money through services and privacy invasion. Where as google is going to make sure it makes money out of you after the purchase mainly by no doubt collecting a shit ton of data on you for advertising.

So I think it's a bit incorrect to say they'll only make 25% off each unit. There'll be a pile of money made out of you data if I had to guess.

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Paris Hilton

Re:"TCO"

What "TCO"?

I bought an SGS for £100 less than the (near-identical - in hardware terms, inferior - in software terms) iPhone 4. Since then I've upgraded the OS several times, up to ICS (CyanogenMod), and downloaded about 200 apps, nearly all of which were free. The "Total Cost" is still at least £50 less than the iPhone, and that's before any apps.

Was there some other "Total Cost" you had in mind?

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Big Brother

Re: "privacy invasion"

I guarantee Google has never made even a single dime from me in advertising. In fact I've never clicked on a Web ad in my entire life, and indeed I use several methods on all platforms to completely eliminate all Web "spam" (that includes AdAway on Android). I don't even allow Google cookies, and for the last few years I've used an OpenVPN privacy service for all Internet access (also on Android), so they can't even log my searches by IP.

When it comes to "privacy" matters, frankly I'm far more concerned about my ISP spying on me on behalf of the government (or in reality, the MAFIAA). That is, after all, exactly why I, and an increasing number of UK Internet subscribers, use a VPN privacy service.

The only money Google ever made from me was from the very few paid apps I bought on the Market - probably less than £50 over the last two years. That's also the only reason I have a GMail account - I don't use it for anything else, I have my own mail server.

Having a "Google" phone doesn't mean you have to be a slave to Google, especially as Android is Free Software.

You can't really say the same about Apple's gizmos.

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Apple (if they wanted to), Google and Amazon can afford to sell their hardware at break-even prices, as they hope to make a lot of money from selling media through their stores after.

Unfortunately, the other Android vendors have no chance of competing with this. If they ship without Google Play, they generally get poor reviews and if they add their own stores, they usually contain very little compared to Google Play.

It's a tricky marketplace.

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Phone vs Tablet Prices

It's funny how the tablet prices don't seem to have an effect on phone prices. You can buy an iPad for £400, which is £100 less than the iPhone 4S. OK the iPhone does have the GSM and Satnav chips in which Apple charge £100 for on the tablet, but that's not the real price, and the iPad has got a much more expensive battery and screen.

Similarly Google's Nexus phones have all come in at the £400-£500 price point, with the other top-end phones. And yet they can sell a similarly well-specc'ed tablet for £160.

I guess people see phone's as a 'necessity', whereas tablets are more of a 'nice-to-have'. Although the main reason is probably that people don't pay for their phones up-front. It's amazing how many people will tell you how their phone was 'free' with their contract. But I wonder if/when these tablet price cuts will start impacting mobile profits - which would make Samsung, in particular, very sad.

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