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There has been plenty of speculation about how much money Google is making — or losing — on its snazzy new Nexus 7. The analysts at IHS iSuppli tore it down, added up the cost of its components, and determined it’s cheaper than originally suspected.
AllThingsD reports that IHS iSuppli calculated a pretty healthy margin: The £128 8GB Nexus costs £97.55 to build and the £160 16GB model costs £102.34 to build. The IHS iSuppli estimate is lower than others that have surfaced since the tablet was announced last month — some reports indicated that Google might actually be losing money on the tablet in order to gain market share. Google’s mobile chief Andy Rubin even admitted that the tablet was a break-even product, indicative that the marketing and development costs are and will continue to be very high. Indeed, this estimate doesn’t take into account these costs, but even so it’s very possible that Google could make money, especially on the 16GB Nexus 7. (Funny how Google spends an extra five quid and charges you £30 more, huh?) Losing money is a losing strategy so it’s nice to hear that Google might be paying more attention to the bottom line than we originally expected. [AllThingsD]
£128? I wish…
Ah, direct currency conversion strikes again!
Google are actually making even more money from us over here in the UK!
Add on 20% VAT and you’re then looking at £153. For the 16GB model, £192. Google are making £6 and £7 on top of the exchange rate. Frankly, that’s not bad at all.
In fact it’s even more silly than that – the UK prices in ££ have been converted into ££, with the assumption that they were the $$ values!
If it’s converted from the US price it wont have VAT added to it, so it’s not actually that far off.
As I said on the last post:
“We don’t know for some very simple reasons:
We don’t know the volumes that the components have been sourced on, we don’t know the payment terms of the contracts, we don’t know how many components are design specific, we don’t know the actual suppliers of the components, we don’t know the manufacturing schedule and the in-house procedures at the assemblers, we don’t know what warranty and aftermarket elements are in the contract, we don’t know the shipping terms, we don’t know whether the sourcing was done through Asus or Google or both, we don’t know the procurement procedures of whoever actually sourced it, and we don’t know if there are any contingent liabilities in the contracts which could impact on the future profitability of the product.
Until we get those details and more, the debate is pointless.”
Couldn’t you have written something original instead of plagiarising another comment
I will when giz do.
Why worry that google sells a £5 16gb for £30?
Apple sells a £5 16gb for £100.
What have you to say now?
That’s irrelevant. Apple has nothing to do with this article. Their pricing strategy is their own. Google can go their own way.
One of my thoughts. £30 isnt that much considering what most people charge. The other is that they need to sell it more coz otherwise people would always just get the higher capacity one. But if they just had the higher one, then some people might be put off from a higher price than what they could have got.
And people will need the 16gb version since there’s no sd card slot!