Google’s Nexus 7 Costs $152 to Make, IHS iSuppli Teardown Finds
Google’s Nexus 7 tablet may be all about an attempt to compete with Apple’s incredibly popular iPad, but when you crack it open, it sure looks an awful lot like Amazon’s Kindle Fire inside. (Read Walt Mossberg’s review of the Nexus 7 here.)
That’s the impression that analysts at the research house IHS iSuppli got when they did just that: They took a Nexus 7 apart in order to see what components are inside, and to estimate what each of them costs. The early verdict, shared exclusively with AllThingsD, is that the low-end eight gigabyte model of the Nexus 7, which sells for $199, costs $151.75 to build.
The higher-end 16GB model, which sells for $249, costs $159.25, the difference being the cost of the memory chips inside.
Andrew Rassweiler, who leads the teardown team at IHS iSuppli, reckons that Google will break even on the 8GB model, and will turn a tidy profit on the 16GB model. “Like Apple, Google realizes it can boost its profit margin by offering more memory at a stair-step price point. It’s getting $50 more at retail for only $7.50 more in hardware cost, which sends $42.50 per unit straight to the bottom line.”
The IHS iSuppli cost estimate is about $30 lower than an early estimate put out last month by another research firm, UBM TechInsights. However UBM’s estimate was made without having first obtained the hardware for analysis.