Google’s $199 Nexus tablet may pressure vendors to cut prices

It is widely believed that Google will entere the tablet market in 2012 with an own-branded 7-inch Android tablet. The search giant has reportedly partnered with ASUS to build a $199 device that will compete against Amazon’s Kindle Fire. These low-cost tablets are expected to have a big impact on the entry-level tablet market and apply pressure to other vendors such as Acer, Lenovo and Samsung Electronics to cut prices, DigiTimes reported on Wednesday. The average gross margin on tablets is roughly 10% to 15% the report said, however as prices continue to drop and internal component costs increase, gross margins are expected to drop rapidly, forcing vendors and component makers to fight over narrowing profits. Google’s Nexus tablet is reportedly a “done deal” and should enter production in April and ship around June. The slate could be unveiled at Google’s annual I/O conference on June 27th if earlier rumors pan out.

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