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Google’s profit on every Nexus 7 tablet sold: $0

Zach Epstein
June 28th, 2012 at 8:40 AM

Google unveiled its first own-brand tablet on Wednesday, and it may end up forcing Android tablet vendors to make big changes to their strategies. The new Android tablet is sleek and its price tag is attractive, but Google Android boss Andy Rubin confirmed one thing the tablet is not to All Things D on Wednesday: a profit maker.

Just as we suggested in a feature on the Nexus 7 published on Wednesday, Google will not make any money on hardware sales. Instead, the Internet giant will look to make money by promoting content sales through its Google Play marketplace, which will offer movies, music and more to Nexus 7 users, and through advertising.

“When it gets sold through the Play store,” Rubin told All Things D. “There’s no margin, it just basically gets [sold] through.”

Rubin also confirmed that Google is absorbing all marketing costs surrounding the new Nexus 7, which could end up resulting in a net loss per unit sold depending on Google’s marketing and advertising budgets.

When Rubin was asked if he thought this strategy would apply pressure to Google’s Android partners, his only reply was that “there is plenty of room left for Android tablet innovation,” All Things D wrote.

Zach Epstein

Zach Epstein has worked in and around ICT for more than 15 years, first in marketing and business development with two private telcos, then as a writer and editor covering business news, consumer electronics and telecommunications. Zach’s work has been quoted by countless top news publications in the US and around the world. He was also recently named one of the world's top-10 “power mobile influencers” by Forbes, as well as one of Inc. Magazine's top-30 Internet of Things experts.




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