Comments on: At $152 in cost, Google’s Nexus 7 leads way for cheaper tablets

By: Lisa Duhon

Lisa Duhon — Tue, 11 Sep 2012 00:44:50 +0000

How long will the price stay this low?

By: Bernard Moon

Bernard Moon — Thu, 12 Jul 2012 16:58:49 +0000

(sorry I couldn’t reply to your last comment below)

I will clarify and say that I assume Google is getting some cut on devices they sell directly. So it’s like a standard retailer relationship with Asus. As for Nexus phones, unless they sold it directly like the Nexus7 I’m pretty certain they didn’t see anything in the bank.

By: Kevin C. Tofel

Kevin C. Tofel — Thu, 12 Jul 2012 13:34:22 +0000

Bernard, you’re not being rude at all by having a reasonable conversation! :) It’s possible that Asus is taking all of the risk and therefore getting all of the profit reward on the hardware as you suggest. And the examples you give of the prior Nexus devices are good ones. What’s different here (at least to me) is that this time around, Google is directly selling these devices through their website and retail partners. There’s no carrier involved, which would typically commit funds and pre-order numbers. Hopefully that helps explain a little where I was coming from and perhaps Google will share some numbers on their investor call to help us figure out their approach. Thanks for the comment!

By: Tushar

Tushar — Thu, 12 Jul 2012 13:25:58 +0000

The Google Nexus 7 is a beast inside, cant wait to get my hands on the quad core performance and the gaming.

By: lokesh2421

lokesh2421 — Thu, 12 Jul 2012 08:05:01 +0000

google would be getting a samll bite..its asus

By: lokesh2421

lokesh2421 — Thu, 12 Jul 2012 08:03:59 +0000

its just a small piece of cake that google would be getting by selling these tablets.ASUS would be profiting with it

By: Bernard Moon

Bernard Moon — Thu, 12 Jul 2012 06:10:10 +0000

Not trying to sound rude, but what you’re saying doesn’t make sense to me. It would make sense if it wasn’t stated as an Asus or Samsung device (for Nexus phones) and it was a positioned as 100% Google, but it’s not. Google, as an Internet company, wouldn’t commit to such funding nor take the manufacturing/inventory risk on its balance sheet. The Nexus phones are sold through numerous retail outlets where Samsung takes the manufacturing risks and spends the marketing dollars. Same will be for the Nexus 7.

By: Jason Baudendistel

Jason Baudendistel — Thu, 12 Jul 2012 06:10:00 +0000

In my opinion it is likely more a small profit that is piggybacked into customer acquisition. Google is merely using there tablet to gain market share for their OS and Advertising revenue as well as grow their brand.

By: brandsteve

brandsteve — Wed, 11 Jul 2012 23:08:53 +0000

I never understand how writers like yourself make a profit conclusion looking just at the price of the parts.

What about cost of assembly?
marketing & sales?
shipping?
support?
returns?
G&A?

Lets assume that all of that is less than $40 per unit, which is possible but maybe not so likely.

Is whatever’s left profit, or simply paying for the sunk costs to build the thing and hopefully pay for the follow-on model?

It seems this is a loss-leader product where the profits are made elsewhere like with a Gillette Razor & Razorblades?

By: Kevin C. Tofel

Kevin C. Tofel — Wed, 11 Jul 2012 20:28:22 +0000

I hear you, Bernard, but that doesn’t make sense to me. Google, not Asus, is selling the devices and therefore collecting the full revenue at point of sale. Google has likely committed funding to produce the tablets, which is the payment made to Asus and where Asus’s profits would be built in. That’s likely how the Nexus One, Nexus S and Galaxy Nexus deals are as well.