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

Updated 4 years ago
Published Jun 28th, 2012 8:40AM EDT

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 Executive Editor

Zach Epstein has been the Executive Editor at BGR for more than 10 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content.

Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment. His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.