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Recent teardown reveals Nexus 7's BOM

Posted: 13 Jul 2012 ?? ?Print Version ?Bookmark and Share

Keywords:Nexus 7? teardown? bill of materials? Kindle Fire?

A recent teardown analysis conducted by iSuppli, it has been revealed that Google's new Nexus 7 media tablet carries a bill of materials (BOM) of $151.75. After manufacturing expenses are added, the cost increases to $159.25. Meanwhile, the high end model with 16GB of NAND flash memory has a total cost of $166.75.

When additional costs are considered, the IHS iSuppli Teardown Analysis Service has estimated that Google will at least break even on sales of the 8GB model, priced at $199and will make a modest profit on the 16GB version, which is priced at $249.

Following Apple's footsteps, Google realized that it can increase profits 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 profits for each high-end model sold.

Nexus 7 price chart

Preliminary Teardown Cost Analysis of Google Nexus 7 Compared to Updated Kindle Fire Costs (Pricing in U.S. Dollars).
Source: IHS iSuppli Research, July 2012

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. Aside from these features, the Nexus 7 also includes a camera and sports a near-field communications (NFC) chip for wireless commerce.

These additional features have given the 8GB Nexus 7 a BOM that is $18 higher than the current cost for the Kindle Fire. IHS iSuppli now has estimated that the BOM of the Kindle Fire has dropped to $133.80, down from the initial $191.65 in November. This drop is largely 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. However, one novel part is the combination gyroscope/accelerometer from InvenSense Inc., which has only been seen in Samsung's Galaxy SIII.

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.





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