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IHS: Google Nexus 7 components cost Rs.8,300

Posted: 13 Jul 2012     Print Version  Bookmark and Share

Keywords:bill-of-materials  teardown analysis  hardware and manufacturing costs  Kindle Fire  iPad 

The 8GB model of Google Nexus 7 tablet – retailing for Rs.10,874.32 ($199 )– costs Rs.8,702.19 ($159.25) to build that includes both bill-of-materials as well as manufacturing cost, according to preliminary teardown analysis by IHS iSuppli.

However, the production cost of the 16GB model is just Rs.409.84 ($7.50) extra—Rs.9,112.02 ($166.75). Google Nexus 7 (16GB) costs Rs.13,606.56 ($249) to customers.

The entry-level 8B version carries a bill of materials (BOM) of Rs.8,292.35 ($151.75), while the high-end model with 16GB off NAND flash memory has a Rs.8,702.19 ($159.25) BOM.

The preliminary analysis account only for hardware and manufacturing costs and do not include additional expenses such as software, licensing, royalties or other expenditures.

"When additional costs are considered, the teardown analysis estimates that Google will at least break even on sales of the 8GB model; and will make a modest profit on the 16GB version."

"Google's Nexus 7 represents less of an attempt to compete with Apple Inc.'s market-leading iPad, and more of a bid to battle with Amazon's Kindle Fire," said Andrew Rassweiler, senior director, teardown services, IHS. "The two platforms are similar in many regards, including the use of the 7-inch display, the eschewing of 4G wireless connections in favour of Wi-Fi, support for virtually identical battery lives and the same pricing for the entry-level models. However, the Nexus 7 has superior specifications to the Kindle Fire, giving it a more attractive feature set that may make it more desirable to consumers."


Source: IHS

The Nexus 7 distinguishes itself from the Kindle Fire with its higher-resolution display using in-plane switching (IPS) technology. Google's tablet also employs a quad-core Tegra 3 processor from Nvidia Corp., compared to the Kindle Fire's OMAP 4430 dual-core processor from Texas Instruments Inc. The Nexus 7 also includes a camera and sports a near-field communications (NFC) chip for wireless commerce—both features absent on the Kindle Fire.

These additional features give the 8GB Nexus 7 a BOM that is $18 higher than the current cost for the Kindle Fire.

IHS iSuppli now estimates the BOM of the Kindle Fire has fallen to Rs.7,311.48 ($133.80), down from Rs.10,472.68 ($191.65) at its introduction in November, due to dramatic reductions in component pricing. These considerable cost reductions provide a breather for Amazon in terms of the subsidy it initially paid to penetrate the market.

The component suppliers in the Nexus 7 offered few big surprises, with almost all the parts having been detected in other media tablets by the IHS iSuppli Teardown Analysis Service.


Source: IHS

However, one novel part is the combination gyroscope/accelerometer from InvenSense Inc.

"Although we have seen a lot of InvenSense gyroscopes, the teardown analysis service has seen only one other combo device—a part from STMicroelectronics in the Samsung Galaxy SIII. Furthermore, the InvenSense part integrates onboard processing, a newer feature for MEMS sensors."

The Nexus 7 is designed, among the other end goals of Google, to funnel users to the newly revamped Google Play store, which is where consumers can buy books, movies, TV shows, magazines, music and apps, said IHS.

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