Google Nexus 7 price: good news for consumers, bad news for other Android OEMs

Google Nexus 7 price: good news for consumers, bad news for other Android OEMsAs expected, Google has stepped into the tablet wars with its own-brand Nexus 7 slate, and – also as expected – it's seriously cheap too, with the 8GB model set to cost just £159.

But with reports emerging that the Nexus 7 took just four months to create, and is being sold at cost, has Google (and Asus) priced other Android tablet makers out of the market?

In an interview with AllThingsD, Asus boss Jonney Shih described the steep development curve for the Nexus 7 as being “like torture”, with Google having simultaneously demanded a high-end specification and a sub-$200 asking price, and giving Asus just four months to achieve it.

But Android head honcho Andy Rubin says he knew Asus was one of the few companies who could deliver the goods, and there's no question that the Nexus 7 has delivered on Google's brief. “We went from zero to working product in four months,” Rubin says.

He also revealed that the Nexus 7 itself is being sold at cost, with Google clearly having taken note of the impact Amazon has had with the Kindle Fire using a similar pricing model.

Rubin has made no secret of his frustration that Android tablet sales still haven't taken off in any significant sense, and the Nexus 7 seems to be a case of “if you want something done right, do it yourself”. Well, with Asus' help too, but you get the picture.

The bad news for other Android tablet makers is that if they were struggling before, the arrival of the Nexus 7 is only going to make matters worse.

Amazon and Google can afford to sell their hardware at cost (or even below cost) knowing that they'll get their money back and then some through app sales and advertising. However, other tablet makers have no such luxury and simply can't compete with the Kindle Fire and Nexus 7 on price.

On top of that, the Nexus 7 will have Android 4.1 Jelly Bean all to itself for a full four months before other tablets get a look-in.

Rubin insists there is still “plenty of room left for Android tablet innovation” despite the Nexus 7's arrival. Just not on a level playing field, it seems.

Read more about: Android

Add a comment
10 comments

satchef1  Jun. 28, 2012 at 15:07

It's looking like a bad time to be an OEM, with both Amazon and Google selling tablets with no need to make a profit on the device. If Apple follow suit and launch a 7" iPad at, say £220 it's going to be very tough going in the tablet market. And what of Surface? I can see Microsoft finding themselves in a tricky position there. The intention might currently be to match it's price to OEM's offerings, but would they still do that if they thought it would prevent Surface from being competitive?

JanSt / MOD  Jun. 28, 2012 at 16:37

It's looking like a bad time to be an OEM, with both Amazon and Google selling tablets with no need to make a profit on the device. If Apple follow suit and launch a 7" iPad at, say £220 it's going to be very tough going in the tablet market. And what of Surface? I can see Microsoft finding themselves in a tricky position there. The intention might currently be to match it's price to OEM's offerings, but would they still do that if they thought it would prevent Surface from being competitive?
Interesting question.
With laptops of course the 'solution' for years have been deals between OEMs and bloatware vendors - Toshiba or Acer cannot really sell £300 laptops...
But how far can that model work on Tablets with thousands of freeware apps? And how will 'full Windows' tablets push expensive FULL WINDOWS apps, when iOS and Android users are used to freeware and £0.99 apps?

barrybarryk  Jun. 28, 2012 at 16:52

I'd go with metro apps being just as cheap as iOS or android apps. They're all the same rubbish.
And desktop apps being more expensive because they're actually worth running. Sometimes they even deserve the full name 'Applications'.
As for the bloatware, there's the 'signature' edition of Windows 8 licenses which will come without any bloatware most likely sold to OEMs at less than a normal version of the license to make up for their losses on losing the bloat license fees.

I'm sure some OEM will crap out a cheap 7" Windows RT tablet at some point but I still don't see the RT versions ever taking off, the pro and x86 tablets are where MS will put their tablets in another league. And as long as they can keep them reasonably spec'd and less than a grand they'll sell well.

corgi74  Jun. 28, 2012 at 17:19

I think Google have killed the 7" WIFI Android tablet market. You want a 7" WIFI now you buy a Nexus. The only chance Samsung or others have now is to offer 3G tablets so they can differentiate themselves.
The irony of fandroids saying Apple stifle innovation when Google have just killed a whole market segment. The best thing that can happen for the customer now would be for an iPad Mini to come out.

barrybarryk  Jun. 28, 2012 at 17:37

I'd hardly say they've killed the market. It's a bargain basement tablet. If you even want to output video from it you'd have to buy their Q thing.

Powerful yeah, but it's still nowhere near as versatile as something like a transformer prime. Things like no rear camera, 3G or expandable memory are deal breakers for a lot of people.

I mean seriously kill the tablet market? It's not even a particularly good tablet. There have been loads of 7" tablets that were even cheaper than that one but they never took off, this one is just a brand name one that's a bit more powerful at the expense of lots of the other extras you'd normally find on an android tablet. Other OEMs have had a few years to make cheap 7" tablet but oddly enough they weren't interested in the marginless bottom of the barrel when people will pay for premium tablets.

corgi74  Jun. 28, 2012 at 19:55

But now you can get a premium tablet at a bottom of the barrel price. If you have £200 and want a 7" tablet what will you buy? This or a tab 2? It's a no brainer. If you want a 7" tablet now then this is the only logical choice. How can any other mainstream manufacturer compete?
I think Samsung will put more emphasis on the note and try to create their own market for phablets.

barrybarryk  Jun. 28, 2012 at 20:14

How's that? A galaxy tab2 7.0 is only £199.00 on amazon now with free delivery has a microSD slot and a 3MP rear facing camera.

But making a product and selling it at cost is hardly breaking the tablet market and it's certainly not a premium tablet. If that's everything you want in a tablet and it's as cheap as it's gonna get then what more 'innovation' do you want, how much more 'competitive' do you want it to be?

People will still prefer 10" tablets for media consumption, but if you want a glorified ereader and have a budget of £160 well google have you covered where as before you didn't have a brand name option.

corgi74  Jun. 28, 2012 at 20:32

Why would anyone buy the 8gb Tab 2 over the Nexus 16gb even with sd and a camera?
I know one thing, there probably won't be a 7" Tab 3.
I never said Google had killed the tablet market. I said they had killed the 7" WIFI tablet market. Never mentioned 10" ones as they are bought for totally different reasons.
You have £200 and want a 7" tablet you now buy a Nexus until the Kindle 2 or iPad mini come out and if priced the same the decision will come down to ecosystem. That's the competitive aspect.

barrybarryk  Jun. 28, 2012 at 21:03

So essentially you reckon it's killed off competition (and therefore bad for consumers) in the 7" WIFI only section by offering a tablet that's better and cheaper than the competitors products?

That's not "stifling" the market, sure it might be throwing their weight around to sell it so cheap and it might annoy OEMs but it still isn't bad for consumers in any way because it's either the best tablet you can make for that sort of money or another OEM WILL make one cheaper either way you can't say it isn't good value.

I don't even like the bloody thing but I know they'll sell loads of them just because they're so cheap.

corgi74  Jun. 28, 2012 at 21:08

I hope someone does make a cheaper better 7" Android tablet but without the income from controlling the ecosystem it will be hard for a decent manufacturer to do so profitably.
Maybe the 8" market will increase?
I'm also not going to get one as I'm happy with my iPad and Kobo for ebooks but I agree they will sell bucketloads because of the price.

Email:

You don't need an account to comment. Just enter your email address. We'll keep it private.

Comment: