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Google Nexus 7 costs $160 to make: iSuppli

Google Nexus 7 costs $160 to make: iSuppli

By Gaurav Shukla | Updated: 12 July 2012 11:50 IST

Google's Nexus 7 tablet might not be a financial dud for Google after all. According to the findings revealed by research firm IHS iSuppli, Google will break even on the 8GB model of its Nexus 7 tablet and will turn a tidy profit on the 16GB model.

The findings come in sharp contrast to the popular belief that Google might not be making any money from the hardware sales, similar to Amazon's Kindle Fire (at its launch).

The entry-level 8GB version of Nexus 7 carries a bill of materials (BOM) of $151.75, according to preliminary findings from the IHS iSuppli Teardown Analysis Service. When manufacturing expenses are added, the cost increases to $159.25. The high-end model with 16GB of NAND flash memory has a $159.25 BOM, for a total cost of $166.75, iSuppli added.

These prices clearly show that the 16GB version, which is being sold at $249, will certainly be able to bring some revenues for the search giant.

"Like Apple, Google has realized it can boost margins by offering more memory at a more profitable price point. Google is charging $50 more at retail for only $7.50 in additional memory cost at the BOM level. This adds $42.50 to Google's bottom line on each sale of the high-end model," noted iSuppli in a press release.

Mountain View-based Google has recently launched Nexus 7 at the company's developer conference and it is now available for pre-order for consumers in U.S., Australia, Canada and UK starting $199.

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