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New Nexus 7 to be a flop for Google because of Android, says analyst, Moto X to score a home run

Posted: , by Daniel P.

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New Nexus 7 to be a flop for Google because of Android, says analyst, Moto X to score a home run
KGI Securities' analyst Ming-Chi Kuo, who monitors the smartphone and tablet industry, got a note out to clients after yesterday's Nexus 7 unveiling that the slate might be a flop for Google, or at least not sell the 5 to 7 million units that it is cracked up to ship.

He puts the estimate at most between 3.5-4 million second generation Nexus 7 tablets sold, citing lack of innovation on the software side of things. While the hardware has certainly received a nice upgrade over the predecessor, it's the same old tablet-y Android running on it, he argues, which is getting a bit long in the tooth. The high-res display, stereo speakers, more memory and faster processor also raise the price a bit compared to the old version at launch, so that might be another deterrent for people, is his thinking.

While the second-generation Nexus 7 showcases Retina display and wireless charging, among other features, the user experience is little changed as compared to other Android tablets. It is also more expensive due to higher component costs. These factors are leading to below-consensus shipments.

At the same time, the tablet landscape is getting increasingly competitive, with Apple reporting a slip in iPad shipments for the first time, and Microsoft going downscreen with 8" and soon 7" Win 8 tablets.

Moto X phone

Moto X phone

The analyst is all up in arms about the Moto X phone, though, saying that his supply channel and demand checks indicate huge interest in a $300 Google Experience handset with unique features. 

He raised his estimate to about 5.5 million units for the handset, up from 3.5 million for last year's Google Nexus 4 phone.

With hardware, software, and services converging as a trend, Google is expected to shift more resources into hardware. By integrating hardware and software to speed up innovation and by launching new flagship models, Google could come to be regarded as a beacon of superior product design in the chaotic Android camp.

We can agree to disagree with the KGI Securities' analyst about the just-announced Nexus 7, as, like our specs comparison clearly shows, there is nothing like it in that price range, and even for $30 than last year's edition, it is still very cheap compared to the alternatives. Ming-Chi Kuo seems to forget that Google is selling these things at cost, or at best throwing a few percentage points towards the tablet-maker ASUS, with the long-run goal of Android domination, and no other manufacturer can afford that without being punished by the markets. 

As for the Moto X, we totally agree that it will be the first device to showcase why Google bought Motorola, and how it will slowly elbow its way into a formidable force in the Android device landscape. What do you think, do you agree with the analyst about the second-gen Nexus 7 being a relative flop?

  • Options

posted on 25 Jul 2013, 02:16 17

1. Kurai (unregistered)

i don't think so . . . . the 230$ pricetag is very tempting . . .

posted on 25 Jul 2013, 02:26 23

6. Antonyjoseph (Posts: 217; Member since: 06 Apr 2013)

The Nexus price tags are attractive only in a few markets like the USA. Here in the Middle East, the existing nexus 7 with wifi only (32 GB) costs the equivalent of USD 320 and the one with 3G support costs equivalent of USD 400.

posted on 26 Jul 2013, 01:52

57. puckhead (Posts: 81; Member since: 13 Jan 2013)

what about the iPAD mini what does that cost? its $329 here.
BTW the nexus7 is prob worth 320, and if the new one is 350 its worth that.

posted on 25 Jul 2013, 03:06 8

17. RaKithAPeiRiZ (Posts: 1488; Member since: 29 Dec 2011)

these Analysts sometime speak with their backs because this tablet will surely be a hit , i know many people who already own nexus 7's waiting to buy the new model , the camera , hd screen ,LTE , will surely make this appetising

posted on 25 Jul 2013, 03:13 2

20. ScottSchneider (Posts: 334; Member since: 06 Dec 2011)

Exactly... I have been waiting to get my hands on the piece of hardware for the past 5 months since I heard about the hardware upgrade and I dont seem to have a change of opinion seeing other Tablets... Used both iOS and currently holding the NX4 to which I have never regretted buying... This should be fluid as ever...

posted on 25 Jul 2013, 06:59 1

36. sid07desai (Posts: 290; Member since: 03 May 2012)

What this "analyst" fails to understand is that the software can be updated in the future, which will provide better features since there is sufficient hardware for next couple of years.

posted on 25 Jul 2013, 09:50

42. daniel_bargs (Posts: 325; Member since: 27 Nov 2010)

In the Philippines, stores sell it for $400+ Not tempting at all.

posted on 25 Jul 2013, 14:12

49. whysoserious (Posts: 318; Member since: 20 Jul 2012)

Not only the price, but as for the "user experience" the analyst also seems to forget that once Key Lime Pie is released, the Gnex 7-2 would be one of the first few devices that would get it.

posted on 25 Jul 2013, 02:19 7

2. Hammerfest (Posts: 383; Member since: 12 May 2012)

I really dont know what to say about this guy... This 2nd Gen Nexus 7 is actually the one I PLAN on purchasing for myself (used the first one belonging to someone else, wanted better spec's) based on both the spec's AND the Vanilla Android experiance...

Hell the Nexus 10 is nice but I look forward and will probably grab the 2nd gen Nexus 10 as well!

posted on 25 Jul 2013, 03:54 2

27. Giggity (Posts: 147; Member since: 17 Nov 2011)

"While the second-generation Nexus 7 showcases Retina display and wireless charging, among other features, the user experience is little changed as compared to other Android tablets. It is also more expensive due to higher component costs. These factors are leading to below-consensus shipments."

I'm totally speechless by this comment of his....SMH

posted on 25 Jul 2013, 04:20

31. Hammerfest (Posts: 383; Member since: 12 May 2012)

No kidding!

Imagine this, Windows 7 was updated to Windows 8 and the START MENU was still there! Better performance but the same KNOWN, POWERUSER FRIENDLY UI! Thats exactly what hes explaining, just on ANDROID instead...

Needless to say OT for my above comment, I installed StartIsBack and am enjoying the sh|t out of the ACTUAL speed improvements over Windows 7!

posted on 25 Jul 2013, 02:19 5

3. TechBizJP08 (Posts: 495; Member since: 25 Mar 2013)

Some people don't care about the software. When they see the specs sheet. Heck, the'll buy in a heartbeat. Just wait Q3, you'll be surprised.. :-)

posted on 25 Jul 2013, 02:20 8

4. aztaxia12295 (Posts: 272; Member since: 22 Nov 2009)

Via apple insider

HA. Nuff said

posted on 25 Jul 2013, 02:24 9

5. Berzerk000 (Posts: 4275; Member since: 26 Jun 2011)

It was a 0.x update, what did they expect?

"It is also more expensive due to higher component costs."

First of all, it's just $30 more. If you're willing to pay $200 on a tablet in the first place, $30 isn't going to be a deal breaker. Secondly, it's an extra $30 for more than twice the quality of components over the first Nexus 7, which is WELL worth it. This is even more of a deal than the original Nexus 7, anyone who thinks an extra $30 will be a deal breaker is just stupid.

posted on 25 Jul 2013, 02:42 8

10. Shatter (Posts: 2036; Member since: 29 May 2013)

Snapdragon s4 pro and that screen for $230 is good enough for me to not question a $30 increase.

posted on 25 Jul 2013, 02:29 5

7. scriptwriter (Posts: 396; Member since: 13 Nov 2012)

Well i think otherwise. The Moto X will not out sell the new nexus 7 because the Moto X is only available in the US. The new Nexus 7 however, is availble worldwide and does not require a contract to purchase.

posted on 25 Jul 2013, 02:43 1

11. Shatter (Posts: 2036; Member since: 29 May 2013)

Why would you not be able to get a Motorala X off contract?

posted on 25 Jul 2013, 02:52

14. Commentator (Posts: 3685; Member since: 16 Aug 2011)

Isn't the allure of the Moto X supposed to be that it's extremely cheap even off-contract?

posted on 25 Jul 2013, 02:34 3

8. vananucho (Posts: 70; Member since: 01 Jun 2011)

I don't mind getting more of the same Android with Nexus 7 II, Apple has been doing that for almost 7 years with its iProducts and they still sell. More of the same Android for 2 years is not bad, plus, Nexus 7 II specs make it future proof for at least 2 or 3 years (I still use my Captivate 3 years after as work phone, running 4.2.2, I plan to do so with Nexus 7 II)

posted on 25 Jul 2013, 02:39 1

9. livyatan (Posts: 867; Member since: 19 Jun 2013)

I find this reasoning to be puzzling.
As if nexus isn't about the newest pure Android build, and this won't receive the KLP..and every other release for the next few years.

Besides, at 7'', this is a tablet that can use those million Android apps out there..some of them may look a bit stretched out but they are still very usable..overall, this is the most flexible and complete tablet software-wise!

posted on 25 Jul 2013, 02:45 7

12. Suraj3337 (Posts: 45; Member since: 20 Apr 2012)

Dear Analyst please go and KILL yourself!

posted on 25 Jul 2013, 03:09 1

18. WindowsiDroid (Posts: 136; Member since: 22 Jul 2013)

You made me laugh.

posted on 25 Jul 2013, 02:51

13. Reonhato (Posts: 5; Member since: 18 Oct 2011)

Same story here. Apart from USA, The Nexus devices are very expensive everywhere else. I don't think it is because of google or ASUS but the greedy retailers trying to milk the hype. The Wifi version of the old Nexus 7 here still costs at an equivalent of $310.00.

posted on 25 Jul 2013, 03:01 2

15. in_core (Posts: 80; Member since: 14 Sep 2012)

Nexus 7 lacks stuffs right? sure sure! iPhone is the motherload of innovation. offering new os, different looks and what not since 2006.
i can smell something here... oh right its Ming-Chi's mouth smelling Timothy D. Cook's (Apple's CEO's) ass.

posted on 25 Jul 2013, 03:05 8

16. PermanentHiatus (Posts: 267; Member since: 22 Jun 2012)

Same guy predicted the new iPhones were coming out last month.

So I wouldn't take this clown seriously.

posted on 25 Jul 2013, 03:10 4

19. Planterz (Posts: 2071; Member since: 30 Apr 2012)

Other predictions by the same "anylist":

The Chicago Cubs will win the World Series in 2013.

"Iron Man 4" will be written, directed, and edited by Tommy Wiseau, who will also replace RDJ as Tony Stark, and will gross $2 billion at the box office. Special effects by James Nguyen.

Snoop Dogg/Lion will renounce marajuana and donate all his album profits to D.A.R.E.

Slash and Axl will reconsile and record an album of Righteous Brothers covers.

Samsung, Nokia, and Apple will merge, call their new company Snapple, and engage in numerous lawsuits against a beverage company for trademark violations.

I will clean my apartment because it actuallyl needs cleaning, and not just because I have friends coming over.

posted on 25 Jul 2013, 03:18 1

21. ScottSchneider (Posts: 334; Member since: 06 Dec 2011)

Hahaha... The last 2 points made my day... LOL's... o 0

posted on 25 Jul 2013, 14:19

50. whysoserious (Posts: 318; Member since: 20 Jul 2012)

I lol'd at Snapple, and then I thought, why not "NO SAMPLE!" XD

posted on 26 Jul 2013, 01:42

55. puckhead (Posts: 81; Member since: 13 Jan 2013)


posted on 25 Jul 2013, 03:20

22. AndroidShiz (Posts: 154; Member since: 08 Nov 2011)

Pretty positive these particular type analyst are Microsoft plants.

posted on 25 Jul 2013, 04:46 1

32. Kreft (Posts: 84; Member since: 27 Dec 2012)

If anything, apple. Wtf are you talking about?

posted on 25 Jul 2013, 03:27

23. daddysbeenabadgirl (Posts: 157; Member since: 26 Jul 2012)

The average person doesn't research specs when buying a tablet and putting this side by side with an original nexus people will hardly notice a difference in speed. Only techies like us know what the differences are .

If google doesnt market or advertise this well it will be hard to make a dent in a saturated market

posted on 25 Jul 2013, 03:58 2

28. _Bone_ (Posts: 2154; Member since: 29 Oct 2012)

They never really marketed Nexus devices anyway, if they hit retail stores or carriers (at a higher price), those companies did the ads. But now many stores are selling it for Play Store price AND putting advertisement behind it, plus Nexus supporters grow each year.

THIS is Google's big entry into the competitive tablet market, cause the new Nexus 7 has no HW compromises, tablet apps are much better this year and the design is lightweight and the screen is awesome. You can put this, with it's price tag, next to the iPad Mini and iPad 4, ppl. can try it out and say wait a minute, it's much more than just a knockoff, it's AWESOME Android tablet.

I can't see this failing.

posted on 25 Jul 2013, 13:16

48. Finalflash (Posts: 3090; Member since: 23 Jul 2013)

Negative, most users know about "specs" and how they work now (usually bigger = better). Plus they will discontinue the first nexus 7 apparently when this thing hits. Also, there is nothing equivalent in terms of form or substance and won't be for at least a year. Apple will NEVER match those specs as has been proven time and again and Samsung has been releasing 1280 resolution 10 inch tablets for the past year when everyone else has moved to at least 1920. So I do not see how another 7 inch tablet or the like can actually be a better deal than this. The point of bare update on the 4.3 JB is down right stupid because everyone knows that this is the transition period to KLP. When that hits all nexus devices likely later this year, it will probably destroy iOS 7 which just kinda caught up, windows 8 which lets be honest continues to languish, and whatever else might be there. Google is in a very advantageous position now and if 2013 was the year they caught up and surpassed everyone else in all mobile spaces, 2014 will likely be utter domination. Not that that is a good thing due to somewhat reduced competition, but they're the only ones making the right moves at the moment.

posted on 25 Jul 2013, 03:41 2

24. boosook (Posts: 1436; Member since: 19 Nov 2012)

With $30 more you get:
- full HD on a 7'' tablet (the iPad mini is still stuck at 1024x768 or someting like that)
- wireless charge
- hdmi port
- stereo speakers
- 2GB ram, faster processor, 4x faster GPU
- open gl es 3 support
- much thinner, lighter, more comfortable to hold (it's more narrow)
- LTE (in the wifi+cellular version)
What else do you want? And it's still cheaper than an ipad mini!
Android 4.3 is not so different, but Google is implementing much of its enhancements directly in the applications, so that many improvements are distributed with apps updates to a wider audience. For example, Android users can use the new gaming features (realtime multiplayer, game status sharing among devices etc.) by simply upgrading Google Play, even if they have an older Android version.
Does this analyst know this? Or perhaps he's talking about an ecosystem he does not know so well?
What's more, Apple and WP are still light years beyond. Only with iOS7 Apple will implement *some* of the features Android has from years... so what should Google do?

posted on 25 Jul 2013, 03:47

25. pinball00 (Posts: 22; Member since: 21 Sep 2012)

i don't think so that's wrong predications I have nexus 7 its super now am looking forward for the second generations good work google

posted on 25 Jul 2013, 03:48 2

26. _Bone_ (Posts: 2154; Member since: 29 Oct 2012)

First it's the greatest bang for the buck since tablets were invented, can't see a better alternative around $200, net even around $300 (the Note 8.0 would be a good one, but it's like $450). Plus Google releases the device to many more retail stores and planning to expand the Play Store hardware availability, so I can't see this being a flop.

Last but not least, it can't be a flop, cause the Nexus devices are not about making a buck off the HW anyway, it's showing off the Android system as cheap yet top performing alternative to expensive devices that don't ever run as smooth. And since yesterday's dinner made world-wide news just like any major Google event, just revealing the Nexus 7, Android 4.3 and Chromecast generated probably around $1B worth of advertisement world wide. Think about it, everybody's talking about Google.

posted on 25 Jul 2013, 04:02 2

29. ilia1986 (unregistered)

I thought apple stopped paying "analysts" in return for absurd predictions..

posted on 25 Jul 2013, 04:18 3

30. KangLee (Posts: 15; Member since: 05 Sep 2012)

You can clearly tell he is apple fan boy from his first statement with "Retina display". Nice try idiot! :-)

posted on 25 Jul 2013, 19:38

51. InspectorGadget80 (unregistered)

HD screen which I prefer but that's just my opinion.

posted on 25 Jul 2013, 04:58 2

33. Evil_SaNz (Posts: 259; Member since: 20 Oct 2011)

The analyst will be fired soon...

posted on 25 Jul 2013, 06:19 1

34. sajboy89 (Posts: 1; Member since: 25 Jul 2013)

This prediction lost all credibility as soon as he coined retina displays with a google product. Apple fanboyism at it's finest.

posted on 25 Jul 2013, 06:44 1

35. HamishG (Posts: 1; Member since: 25 Jul 2013)

This has got to be an Apple harvested assessment. Why would an operating system which has just started to reach a status of adolescent maturity be a draw back? We have finally reached the point of tinkering, hardware capabilities are consistent with the last issued devices, therefore no substantial slow down issues when new updates are rolled out. Considering the iPhone 5 only has 1 Gb of ram, when the next device comes out (which must have 2 gig) every old model will either be outdated and run like a dog or be obsolete as far as any substantial upgrades. My Nexus 4 meanwhile remains compatible for the foreseeable future and it will sync with my new Nexus 7 like a dream, Apps running consistently between them. How can the best mobile operating system on the planet be a drawback?

posted on 25 Jul 2013, 07:10

37. Edmund (Posts: 656; Member since: 13 Jul 2012)

I tend to agree with that. There's a lot to like about the moto x

posted on 26 Jul 2013, 01:35

54. puckhead (Posts: 81; Member since: 13 Jan 2013)

what? MotoX hasnt even been released yet! There's a lot to like? what leaked pic? sorry so stupid

posted on 25 Jul 2013, 07:13 1

38. Googler (Posts: 813; Member since: 10 Jun 2013)

Software failure? That can be updated at any time. Meanwhile, the hardware is outstanding, and pricing to match. This analyst missed the boat on this prediction.

posted on 25 Jul 2013, 07:23

39. Edmund (Posts: 656; Member since: 13 Jul 2012)

Affordable Atom tablets running Windows 8 will be the next big hit, trust me. Google will be lucky to sell 2 million of these.
The moto x will be quite sucessful in the US and UK but will ultimately struggle in the more important Asian markets like China, India, and Indonesia.

posted on 25 Jul 2013, 07:47 1

40. InspectorGadget80 (unregistered)

Those Analyst needs too stop smoking so much.

posted on 25 Jul 2013, 08:15

41. dorianb (Posts: 595; Member since: 24 Oct 2012)

I don't wanna call this guy a dope, but if it looks like a dope & talks like a dope. You might wanna check for the other 6 dwarves.

1. People will pay for better specs & no real software bump all the time. Look at the iPad.
2. Nothing else remotely as good in the same price range.
3. Real distribution. Look at all the retailers that are going to carry it compared to the few that had the original.

The Moto X should sell nearly as well as the Nexus 4. The only real problem that might (i.e. will) occur is Verizon. They will cram their DROID offering down peoples throat. So look for T-Mobile, AT&T to carry the selling load... Again. Oh, yeah, I think Sprint too. *after thought*

posted on 25 Jul 2013, 10:33

43. roldefol (Posts: 4242; Member since: 28 Jan 2011)

"They will cram their DROID offering down peoples throat"

Yes, the DROIDs will compete with the X at Verizon, but I don't see that as a bad thing. At least the DROID Mini and Maxx offer something different from the X (aside from pricing). The X essentially completes the small/medium/large Motorola lineup at Verizon.

posted on 25 Jul 2013, 11:14

44. sats.mine2k4 (banned) (Posts: 208; Member since: 10 Aug 2012)

Does "Ming-Chi Kuo" mean stupid in Chinese?

posted on 25 Jul 2013, 11:38

45. imkyle (Posts: 1073; Member since: 18 Nov 2010)

Wait until Key Lime Pie is on this beauty. I pre ordered mine yesterday and I cannot wait to get it.

posted on 25 Jul 2013, 13:03

46. androidrocks (Posts: 61; Member since: 14 Apr 2012)

The source (***cough***appleinsider***cough***) speaks for itself...enough said..

posted on 25 Jul 2013, 13:11

47. androidrocks (Posts: 61; Member since: 14 Apr 2012)

Sorry, someone already posted the same comment...my mistake.

posted on 26 Jul 2013, 01:33

53. puckhead (Posts: 81; Member since: 13 Jan 2013)

yep, and makes even more sense because iOS7 is coming and it is the first time apple has made a major software upgrade.

posted on 26 Jul 2013, 01:28

52. puckhead (Posts: 81; Member since: 13 Jan 2013)

this must be a joke, he is saying the Nexus7 will be a flop due to software? That doesnt even make sense! Does this guy even know how android works? OMG! Long in the tooth?? you get a way better tablet for 30 bucks more. not only is the screen and processor upgraded, but it has more RAM, two speaker instead of one and a rear camera. No 7 to 8 inch tablet has a resolution this high to date, all this for $229. WTF else could they do to make it a better deal? and then he makes a prediction about the MotoX which hasn't even been released yet, this has got to be a joke....

posted on 26 Jul 2013, 01:44

56. puckhead (Posts: 81; Member since: 13 Jan 2013)

LOL I swear phonearena puts articles like this on here just so they can sit back and laugh their asses off from the comments from the android fans....everyone's going wild LOL

posted on 04 Aug 2013, 16:39

58. chuchurocket (Posts: 1; Member since: 04 Aug 2013)

Please tell me it's a translation error and someone switched the device names by accident. The nexus 7 is a sub-$300 device with the hardware and power of a $600 flagship device. The Moto X is the opposite, a $600 device with the hardware and spec of a $300 low-mid range device. Obvious the anticipated flop shold be the Moto X

Oh wait, "via AppleInsider". nevermind, everything's normal here.

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