Two days ago we offered information based on a report from UBM Tech Insights which indicated that the price of production of the new Google Nexus 7 was $ 184. However, today another report comes to our hands that seems to indicate that the guys at UBM Tech Insights did not disassemble the Google tablet piece by piece. iSuppli provides a list of materials in which it is clearly seen that the production price of the 7GB Nexus 8 is $ 151,75.
ISuppli magazine gives a detailed list of the two versions of the tablet manufactured by Asus and that will carry the operating system 4.1 Android Jelly Bean. Additionally, it compares them to the 8GB Kindle Fire. The only difference between the 8GB version and 16 GB is the 8 GB of memory difference in NAND Flash memory, valued at $ 7,50, so the second version would amount to $ 159. Kindle Fire has a lower material cost of $ 133, to which must be added a manufacturing cost of $ 6, meaning that its production costs a total of $ 139.
In the case of the Nexus 7, its manufacturing cost is $ 7,50 for the two models, so the total production cost would be $ 159,25 for the 7GB Nexus 8 and $ 166,75 for the 16GB. . Therefore, Google would have a profit margin of $ 39,75 for the 8 GB and U.S. dollar 82,25 for the 16 GB one. Marketing and distribution expenses should be subtracted from these margins. The 25 dollar gift promotion for applications en Google Play it will be effective only during launch but may need to be considered as well.
In any case, even if the margins are slim on Nexus 7 profits, the situation is far more favorable for Google than the one described by UBM Tech Insights. This is even clearer in the 16GB version. ISuppli's head of teardown Andrew Rassweiler notes that charging a disproportionately unequal amount for devices with the only difference being larger internal memory to increase the profit margin is a practice Google has traced to Apple. Charging $ 50 for what is actually worth $ 7,50 adds to your profit margin $ 42,5 more, it's that easy.
In the Nexus 7 comparison with Amazon tablet and its difference in the cost of production of 16 dollars, it is easy to point out that it is mainly based on the uneven quality of its processors. While Google Nexus 7 carries a Tegra3 processor Quad-core from NVIDIA, Kindle Fire uses a Texas Instruments (TI) OMAP 4430 dual-core processor. The screen is also part of the origin of this difference in the cost of production and that is that the Nexus 7 has a resolution of 1.280 x 800 pixels while the Kindle Fire has 1.024 x 600.
Some components that do appear in Nexus 7 but that we do not find in Kinde Fire delve into the explanation. This is the case with the front camera that costs $ 2,50, or the NFC port, of a chip that improves the operation of the GPS and another from InvenSense that fulfills the double function of gyroscope and accelerometer.
Perhaps this comparison will soon be sterile since in autumn we will enjoy the Kindle Fire 2 that will bring better components than its predecessor.