Google to likely make modest profit on Nexus 7, IHS teardown reveals
A teardown of the Nexus 7 tablet reveals Google is likely to break even on the $199, 8 GB version of its tablet while earning a modest profit on the 16 GB version, priced at $249.
IHS iSuppli said the 8 GB version of the Nexus 7 has a bill of materials (BOM) and manufacturing total cost of $159.25. The 16 GB version total is $166.75.
"Google will at least break even on the 8 GB model ... and will make a modest profit on the 16 GB version," IHS said in a statement last week.
With the 16 GB version, Google is charging $50 more at retail by adding only $7.50 more in memory cost, adding $42.50 to Google's bottom line, IHS said.
IHS said its teardown totals are preliminary and don't include software, licenses and royalties.
IHS analyst Andrew Rassweiler said the Nexus 7 competes more with Amazon's Kindle Fire, also a 7-in. tablet that sells for $199, than the
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