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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?

58 Comments
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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: 3709; 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: 76; 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: 137; 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: 2103; 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)


hilarious....

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.

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