Google charges $50 for $7.50 worth of storage in the Nexus 7

Google charges $50 for $7.50 worth of storage in the Nexus 7

Summary: By removing a micro SD card slot from the Nexus 7, Google is in a position where -- like Apple with the iPad -- it can charge a premium for storage.

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Research firm IHS iSuppli have carried out a teardown of Google's Nexus 7 Android tablet and estimated that the 8GB model --- retailing for $199 --- costs almost $160 to build. The 16GB model, which retails for $249, only costs an extra $7.50 to build.

The teardown also reveals how Google has taken a leaf out of Apple's book and realized that there's money to be made by charging a premium for extra storage.

As a rule, Android devices have a micro-SD card slot that allows additional storage to be added. This slot is absent on the Nexus 7 and the teardown uncovers why Google decided to prevent users adding more storage at will: it's all down to profit.

In other words, if you want more storage, you end up paying an eye-watering $50 for $7.50 worth of storage. Compare this to a 32GB micro-SD card, which costs less than $20, and Google must be laughing. 

Apple uses the same strategy with the iPad, which comes in 16GB, 32GB and 64GB models, with $100 price jump between each. However, it costs Apple less than $20 to bump the storage from 16GB to 32GB and about $35 to bump it from 32GB to 64GB.

Just as Apple does with the iPad, Google has adopted Apple’s strategy of charging a premium for higher storage capacities, and forces people’s hands by not offering a cheap storage expansion option via micro SD card.

This one tactic adds $42.50 to Google’s bottom line on each sale of the high-end Nexus 7.

The teardown reveals that the most expensive component of the Nexus 7 is the display and touchscreen, which cost $38 and $24 respectively. This is a significant saving compared to the display and touchscreen components that Apple uses in the iPad 3, which cost $87 and $40 respectively.

The teardown also highlights some of the major differences between Google Nexus 7 and Amazon's Kindle Fire. The inclusion of the far superior quad-core Nvidia Tegra processor compared to the OMAP 4430 dual-core chip found in the Kindle Fire adds $7.50 to the bill of materials.

Additional feature such as a higher-resolution display using in-plane switching (IPS) technology, a camera and an NFC chip come together to give the Nexus 7 a bill of materials that's $18 higher than Amazon's Android tablet.

iSuppli's teardown assessments only take into account the hardware and manufacturing costs, and ignore other expenses such as software, licensing, royalties or other expenditures.

An earlier teardown of the tablet by repair specialists iFixit found that the way Google designed the Nexus 7 made it far easier to take apart and repair than Apple's iPad 3.

Image source: IHS iSuppli, iFixit.

Topics: Google, Android, Hardware, Storage, Tablets

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81 comments
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  • Expandable Memory

    Adrian, I noticed you talk down on Android/Google related articles often. But this time it's totally legit. I mean...Android users love to bash the iPad for being a stickler when it comes to expandable storage..but now Google is doing the exact same thing and Android users on all forums are slobbering over this tablet.

    *takes out the popcorn*
    JL05XI
    • No

      I'm not slobbering over it. I noted when it came out that the lack of expandable memory was a non-starter for me, even if the price is half that of a comparable IPad.
      fldbryan@...
      • +1

        Better CPU or not, it can't even compete with my Flyer.
        Natanael_L
      • It should be half the price

        It is less than half the size and half the memory!!
        global.philosopher
    • One small difference:

      You can buy exactly 2 Nexus 7 16gb for the price of one 16gb iPad. If I'm paying over $500 for a computer, it dang well had better have the ports and slots I want. If I'm paying half that, I can let it slide.

      There's price gouging, and there's not wanting to lose your shirt giving away electronics.

      I can't really fault Google and Asus wanting to make $50 profit on a $250 device. They have to split this profit for one thing, and then there's marketing costs to be paid. It's not likely anyone is making much money on this thing at all.

      While I would prefer a device with 16gb and an SD slot, I would be willing to pay more for this. If there is demand for that I think the market will supply it, and if you demand that you should wait for it and be prepared to pay what it's worth.

      The N7 is one heck of a device and by far the best value for it's price, so complaining that you are getting "reamed" on the cost of storage is really looking a gift horse in the mouth and complaining the teeth aren't all made of gold.
      ArtInvent
      • Whoot

        A 5-Star response.

        I will be ordering my N7 very shortly and at that price point, I love it in advance already.
        oldvices@...
      • We have to complain

        Google isn't going to know why some of us aren't buying their product if we aren't telling them why.
        marbo100
      • Go for it.

        You can buy two and stick them together.

        BTW, the iPad2 is $399.
        global.philosopher
      • Free computers for everyone

        So they are making no money on it but if they release a higher end version at cost you'll buy it??

        Well hell....every computer manufacturer should follow this model then everyone will be happy....except investors i guess.
        global.philosopher
        • Every manufacturer...

          How much do you think HP makes on a $300 laptop?
          symbolset
      • Want or need?

        Is it a matter of you wanting the port simply because the iPad doesn't have them and that makes for a talking point or is it that you actually need them? With my iPad I have found that I never run into a case where I need either a USB port of SD Slot.
        non-biased
    • Not The True Cost

      I noticed they have not factored in patent licensing fees. And yeah, lets all bash Google for wanting to make a very small profit on devices they are practically giving away. I will take my 4 Nexus 7's over 2 iPads any day.
      EntrepreNerd
      • Good for you.

        I want four too cause I need one in the car, at work, at home and in the john....and I am too lazy to carry it around.
        global.philosopher
      • That's not where their profit comes from

        Do you honestly believe they are almost giving the Nexus 7 away out of the goodness of their hearts? Their real profits come from advertising and that is the ultimate goal, not giving away devices because they want to be nice.
        non-biased
        • who cares?

          I think a huge part of it is to expand Google Play as a serious competitor for Amazon. But either way, as long as that tablet is that price, who cares?
          Jen Watson
    • Speak for yourself

      When some of us lambasted Apple's greed-laden strategy, we WILL equally apply it to others that try to be as slippery. I see no reason for a double-standard here. Why do you claim there should be one?
      HypnoToad72
      • Comparison

        Apple refuse to allow Flash....people scream...but no Flash is available on Jellybean.

        Apple offer no SD slot...people scream...but none available on Fire/Nexus.

        Apple restrict you to App Store...people scream...but Fire is tied to Amazon and Nexus is tied to Play.

        Lots of double standards here as though Apple, Amazon and Nexus are different. They each do their own thing and that is where the choice is. Choose Fire or iPad or Nexus but mark my words the business models are very similar.
        global.philosopher
        • Comparison?

          When my kindle costs me $800 you'll hear me scream... in the meantime I'm happy with what I paid for which I knew the specs of ahead of time. My "scream" against apple was rushing to the store to buy my kindle... passing the apple iPads on the way. I really could care less what apple put into or leaves out of their overpriced crap.
          tricotec
          • Overpriced or your cheap?

            The Fire is not even half the tablet that the iPad is yet costs half the price. Now since the iPad is over twice the device for twice the money and you went for the Fire does that mean the iPad is overpriced or that your just plain cheap?
            non-biased
        • Comparison?

          "Apple restrict you to App Store...people scream...but Fire is tied to Amazon and Nexus is tied to Play".

          You can use Play, Amazon App Store, Get Jar amongst others and you can sideload if you wish. You are not forced to use Play if you do not wish. There is no restriction on the Nexus 7.

          "Apple refuse to allow Flash....people scream...but no Flash is available on Jellybean".

          Google didn't refuse to allow Flash, adobe decided to pull their product from use on mobile devices so they could focus on HTML 5 development, Google cannot make Adobe develop for Android again. The situation with Apple was very different that was down to the decision of a pig headed autocrat.
          Matthew Lyons