Monday, July 23, 2012

Google can't meet unexpected demand for larger-sized Nexus 7

It's good news for Google's bottom line: the company has been hit by unexpected demand for the larger-sized 16GB version of its new Nexus 7 tablet. The bad news is that it can't keep up with orders, and has halted orders, instead placing a "coming soon" message on its site.

The search giant underestimated demand for the larger, 16GB version of its 7-inch Nexus 7 tablet, which has sold out from retailers and online while demand for the smaller 8GB version has been relatively low.

The 8GB model costs $199 and continues to be listed on Google Play as "in stock," with delivery in 3-5 business days, while the 16GB version only offers an option to "sign up to be notified by email" when it becomes available (as shown).

Google probably assumed that the 8GB model, priced the same as the Amazon Kindle Fire, would be the larger seller of the two, based on that pricing. However, the Nexus 7 has much higher hardware specs than the Kindle Fire, and with a quad-core processor, among other things, is bargain priced even at $249.

For Google's bottom line, popularity of the 16GB model is excellent. Market research firm iSuppli said that the 16GB model costs $159.25 in terms of materials, while the 8GB model costs $151.75. Add on $7.50 to build, and compare with the respective retail prices of $249 and $199 and it's clear the larger tablet is much gentler to Google's bottom line (Google has the tablet built by Asus, remember).

Google's Nexus 7 is selling so well, that speculation over a so-called iPad mini, a 7.85-inch version of Apple's best-selling iOS tablet. Many rumors have leaked over the past few months, with former Apple CEO Steve Jobs set to roll over in his grave (he once famously said that tablets smaller than 10-inches in size were DOA, to which we always responded that the iPad was only 9.7-inches diagonally).

The latest rumors point to an October launch alongside the iPhone 5.

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