Google Nexus 7 might actually cost $151.75 to produce, teardown reveals
Not long ago, a research firm called UBM Techinsights reported that the Google Nexus 7 was made out of $184 worth of components. The folks at iSuppli, however, believe that this estimate exceeds what the tablet's manufacturing cost actually is. After taking a peek under its hood, they came up with a $151.75 bill of materials for the 8GB model, and $159.25 for the 16GB version. As a side note, these can currently be pre-ordered for $199 and $249 respectively.
But why are the two estimates different? Well, it turns out that the previous report was made without actually having access to the device. In contrast, the Google Nexus 7 was taken apart by iSuppli, which allowed the guys to come up with a presumably more accurate production cost. Research and development costs, advertising, assembly, or any other related expenses are not included in latter's calculations.
In unison with what UBM Techinsights reported, iSuppli estimates that Google is selling the 8GB Nexus 7 tablet at cost and is making a small profit on the 16GB model. The device is expected to generate more income as people purchase applications, movies, and other content from the Google Play store – a marketing model reminiscent to that of the Amazon Kindle Fire.
But no matter how much the Google Nexus 7 costs to produce, it is still a great buy considering that for less than $200 you get a full-fledged Android tablet with a quad-core Tegra 3 processor inside. Or perhaps before getting one, it would be wiser to wait and see what Amazon has up its sleeve? Let us know what you think by dropping a comment!