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

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.

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.

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.

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?

Related phones

Nexus 7 (2013)
  • Display 7.0 inches
    1200 x 1920 pixels
  • Camera 5 MP (Single camera)
    1.2 MP front
  • Hardware Qualcomm Snapdragon S4 Pro, 2GB RAM
  • Storage 32GB,
  • Battery 3950 mAh
  • OS Android 5.0 Lollipop
Moto X
  • Display 4.7 inches
    1280 x 720 pixels
  • Camera 10 MP (Single camera)
    2 MP front
  • Hardware Qualcomm Snapdragon S4 Pro, 2GB RAM
  • Storage 16GB,
  • Battery 2200 mAh
  • OS Android 5.1 Lollipop



58. chuchurocket

Posts: 1; Member since: Aug 04, 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.

56. puckhead

Posts: 81; Member since: Jan 13, 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

52. puckhead

Posts: 81; Member since: Jan 13, 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....

46. androidrocks

Posts: 63; Member since: Apr 14, 2012

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

47. androidrocks

Posts: 63; Member since: Apr 14, 2012

Sorry, someone already posted the same mistake.

53. puckhead

Posts: 81; Member since: Jan 13, 2013

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

45. imkyle

Posts: 1117; Member since: Nov 18, 2010

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

44. sats.mine2k4

Posts: 208; Member since: Aug 10, 2012

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

41. dorianb

Posts: 617; Member since: Oct 24, 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*

43. roldefol

Posts: 4745; Member since: Jan 28, 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.

40. InspectorGadget80 unregistered

Those Analyst needs too stop smoking so much.

39. Edmund

Posts: 656; Member since: Jul 13, 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.

38. Googler

Posts: 813; Member since: Jun 10, 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.

37. Edmund

Posts: 656; Member since: Jul 13, 2012

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

54. puckhead

Posts: 81; Member since: Jan 13, 2013

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

35. HamishG

Posts: 1; Member since: Jul 25, 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?

34. sajboy89

Posts: 1; Member since: Jul 25, 2013

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

33. Evil_SaNz

Posts: 259; Member since: Oct 20, 2011

The analyst will be fired soon...

30. KangLee

Posts: 18; Member since: Sep 05, 2012

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

51. InspectorGadget80 unregistered

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

29. ilia1986 unregistered

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

26. _Bone_

Posts: 2155; Member since: Oct 29, 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.

25. pinball00

Posts: 22; Member since: Sep 21, 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

24. boosook

Posts: 1442; Member since: Nov 19, 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?

23. daddysbeenabadgirl

Posts: 157; Member since: Jul 26, 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

28. _Bone_

Posts: 2155; Member since: Oct 29, 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.

48. Finalflash

Posts: 4063; Member since: Jul 23, 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.

22. AndroidShiz

Posts: 154; Member since: Nov 08, 2011

Pretty positive these particular type analyst are Microsoft plants.

32. Kreft

Posts: 84; Member since: Dec 27, 2012

If anything, apple. Wtf are you talking about?

19. Planterz

Posts: 2120; Member since: Apr 30, 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.

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