Google's move to a cheap tablet device (might be costly)

Taken from: 

http://www.computerworld.com/s/article/9228479/Google_s_Nexus_7_tablet_move_could_be_costly

Google has supported tablet devices for the past several years - but ... the reality is that nobody is really challenging Apple's iPad.  Amazon's Fire, Barnes and Nobel's Nook are weak sisters in the tablet field - but definitely cheaper at about $199 as compared to Apple's $499!!

The article notes:

"Computerworld - A $199 Nexus 7 tablet from Google would raise the stakes for Amazon's Kindle Fire and Barnes & Noble's Nook tablet, which sell at a similar price and screen size.
But since the 7-in. touchscreen device is reportedly a quad-core tablet with other costly hardware, the Nexus 7 might also in some ways compete with the popular Apple iPad or perhaps the Microsoft Surface tablets unveiled last week. The iPad starts at $499; pricing for the Surface has not yet been announced.
To offer high-end features at a low cost with the Nexus 7, Google seems to be acknowledging that the Android strategy of having third-party companies make tablets hasn't worked. And that means Google must take aggressive pricing steps to make up the difference.
"If Google wants to jump-start the Android tablet market, which has been weak to date, then a low-priced, high-quality device could do that," said Jack Gold, an analyst at J. Gold Associates. "Google certainly has an incentive to make the Android tablet a competitive product in the market, and maybe driven more by wanting to capture a bigger share of the pie, than by supporting its OEMs.

"The big payback to Google from selling a $199 tablet would come from the sales of apps and the ads that Google sells for its search tool, analysts noted. "Considering that the tablet ecosystem war is getting heated now with Microsoft having a bigger role, Google might feel the need for a more aggressive [pricing] strategy," said Carolina Milanesi, an analyst at Gartner.

 So ... it sounds like Google is willing to sell their tablet cheaper than they can make it - but make up the difference through sales of apps and service.  


Can Google be a player in the tablet market?  Can Microsoft with the Surface also make a dent in the iPad world.  Seemingly if the cost is low enough, features are high enough, these tablets and strategic plans can level the playing field.  And ... will Apple - who has been enjoying record high profits from tablet sales - be forced to compete?  The battle has begun - and it will be very interesting to watch!!!