There’s a lot of buzz all around on the Web about Google’s own tablet brand Nexus 7. The device is to hit few markets by mid of July and is learned to be competing directly with Amazon’s Kindle Fire and indirectly with Apple’s iPad.
Nexus 7 is to run on the latest Android 4.1 Jelly Bean operating system and is priced just $199, the price that Amazon fixed for its Kindle Fire last year.
Amid all these, giving the best hardware at so low price, the big question is how much the tablet actually costs to Google? How much profit margin Google is keeping in offering the best ever 7-inch tablet to us at such a low price?
IHS iSuppli research house has tried to give an answer to this. Analysts at iSuppli says the low-end 8GB Nexus 7 tablet is costing Google $151.75 to build and the search giant is selling the device at $199.
The firm also added that 16GB higher-end model of the Google tablet costs $159.25 to make and it is to be retailed at $249. The main difference in the prices of the two models is due to the cost of memory chips inside.
The cost difference between the two models is just around $8 but the retail price difference is $50 approximately. Google here follows the pricing policy of Apple that boost profit margin by offering more memory at stair-step price point.
Do write in the below comment box what is your own view about the costs and profit margins of Google’s Nexus 7.