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At cost tablet is so popular ASUSTek is upping production

While the Galaxy Tab 10.1 from Samsung Electronics Comp., Ltd. (KSC:005930) saw some modest international sales success, no Android tablet to date has truly challenged market dominator Apple, Inc. (AAPL), unless you count Amazon.com, Inc.'s (AMZN) quasi-Android Kindle Fire.

Google Inc.'s (GOOG) new Nexus 7 tablet runs the main-line Android release -- specifically Android 4.1 "Jelly Bean" -- unlike the Kindle Fire, which runs Amazon's own special fork of Android.  But the tablets do share a common price -- $199 USD for the 8 GB Nexus 7.

Now they share something else -- the Nexus 7 appears to be the first pure-Android tablet to be a market-moving hit.

Google reports that despite demand for the 8 GB variant being soft, it is seeing wild demand for the 16 GB version that retails for a modest $249 USD.    The tablets are reportedly sold at cost, which may be part of their strong appeal.

The sales success of the higher-storage variant is unusual, given that competitors like Research in Motion, Ltd. (TSE:RIM) have typically seen their highest sales with the cheaper lower-storage models.  In fact, the success took Google by surprise and the company has now been forced to put sales of the popular 16 GB model on hiatus, as it struggles to catch up with a back-log of orders in the U.S. and UK.

Nexus 7

The company now lists the 16 GB model as "coming soon", offering hopeful buyers the chance to sign up for an email alert when more stock becomes available.

Announced June 27, the tablet's hardware is produced by Taiwanese computer maker ASUSTek Computer Inc. (TPE:2357).  The tablet packs a Tegra 3 quad-core CPU from NVIDIA Corp. (NVDA).  It is primarily available through the Google Play store, but was also picked up by several major U.S. and UK retailers late last month.

The tablet has reportedly sold out at many of its U.S. partners' stores.  ASUSTek is upping production, but it may be weeks before customers can get their hands on the hot tablet.

The success of the 7-inch Kindle Fire, and now the Nexus 7 have reportedly alarmed Apple who is reportedly feeling pressure to release a "mini-iPad" early than planned.

Before his death CEO Steven Jobs vetoed such a design, insisting it would be a market failure.  In one of his numerous rants in his waning years, he commented:

The reason we wouldn't make a 7-inch tablet isn't because we don't want to hit a price point, it's because we don't think you can make a great tablet with a 7-inch screen.  The 7-inch tablets are tweeners, too big to compete with a smartphone and too small to compete with an iPad.  [Increasing screen resolution on small devices is] meaningless, unless your tablet also includes sandpaper, so that the user can sand down their fingers to around one quarter of the present size.

Well the success of its rivals reportedly has Apple prepared to tell its legion of loyal followers to get the sandpaper out and ready their fingers for a mini-iPad.

Sources: Google Play, The Guardian



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Pricing scheme
By The Raven on 7/23/2012 3:46:09 PM , Rating: 4
Though it is still BS I'd like to point out...
quote:
The sales success of the higher-storage variant is unusual, given that competitors like Research in Motion, Ltd. (TSE:RIM) have typically seen their highest sales with the cheaper lower-storage models. In fact, the success took Google by surprise and the company has now been forced to put sales of the popular 16 GB model on hiatus, as it struggles to catch up with a back-log of orders in the U.S. and UK.
Maybe that is because Google is not charging $100 per step of memory like RIM and Apple. Not that $50 for 8GB is a deal or anything lol, but it is less of a jump for the consumer.
http://www.dailytech.com/Article.aspx?newsid=24880...

This is a Googles to Apples comparison. But you can see that it is not simply a question of value but also affordability.




RE: Pricing scheme
By fic2 on 7/23/2012 4:36:24 PM , Rating: 3
Not to mention just overpricing Apple with comparable specs. Like Motorola pricing their Xoom $100 over the equivalent Apple product when it first came out.

I do have a hard time believing that the 16GB Nexus is at cost unless the 8GB is below cost.


RE: Pricing scheme
By chimto on 7/23/2012 5:20:22 PM , Rating: 2
I was wondering about the pricing myself. Can someone clarify this? What is ASUS getting out of this. Why would they manufacture something for nothing. I understand why Google would sell at cost. They gain by building Android market share and through ads.

I would guess that ASUS is making something off each tablet. So if ASUS can do it, I would think other manufacturers could build and sell tablets in this price range and make a profit also. Anybody know?


RE: Pricing scheme
By SPOOFE on 7/23/2012 5:57:11 PM , Rating: 5
quote:
What is ASUS getting out of this. Why would they manufacture something for nothing.

My assumption was that "at cost" meant that Google wasn't profiting off the device, ie - they're selling it for what Google pays Asus for making it. Asus could still be making a profit off of Google.


RE: Pricing scheme
By sprockkets on 7/23/2012 7:11:03 PM , Rating: 2
Even before Google got involved they were going to sell it for $250 anyhow.


RE: Pricing scheme
By Samus on 7/24/2012 1:31:54 AM , Rating: 4
The psyche of most Apple iPad/Macbook owners, at least those with wealth, is to always purchase top of the line.

I know many people who will settle for nothing less than the $900 64GB iPhone 4S, $2000 Macbook Air w/ 256GB SSD + Applecare, and of course the $800 iPad 64GB + LTE, even though they will be unlikely to use 1/10th of that storage space because all they are buying them for is surfing, emailing, watching their investments, and finding new ways to spend money.

This is a market everyone wishes they had, but only Apple ever will have. It takes an insane level of chic exclusivity, presentation of wealth and of course brainwashing/believing the hype/following the lemmings off the bridge that only Apple will ever be disturbed enough to accomplish.

The $64,000 is, after all, how do you actually one-up Apple to appeal to their customers. So far, amazingly, no corporation is conceeded enough to even step up to the plate.


RE: Pricing scheme
By B3an on 7/23/2012 8:20:29 PM , Rating: 2
People are buying the 16GB model because its still cheap, and you really need 16GB. The 8GB model just dont cut it, and being as this thing has no expendable storage/SD card, then its obvious which model to get.


fatal flaw
By Nortel on 7/23/2012 3:43:19 PM , Rating: 1
Other then the price break a 7 inch tablet would bring (~$350?) what usecase does this form factor appeal to? I can't really think of a reason for using a smaller tablet. A 3.5 - 4 inch phone/ipod touch fits in a pocket and 10 to 15 inch ipad/laptop fits in a bag. Are there really that many people who have precisely budgeted for a device that lies between the iPod touch and the iPad? Heck, the old iPad is still available for $419.




RE: fatal flaw
By Topweasel on 7/23/2012 4:36:05 PM , Rating: 5
Long term use. Having both a Nook Color and TF101 I basically bring both of them around where ever I go.

A 10" tablet isn't a comfortable reading device. It's heavy and awkward to hold onto for hours at a time. Great for playing a quick game, or for putting it in a stand to watch a movie. Certainly scrolling through some pictures, or browsing the web are great to.

A 7" tablet is easier to carry around. Easier to read for longer periods of time. Better to hold onto when laying on your side. Problem is the only real good and affordable ones have weak specs and highly modified OS's.

Enter my new N7. Now I get the flexibility of my TF101 combined with the reading abilities of the Color. All in one tablet, while losing a bit in web or video room. But JB runs so smoothly and Chrome works so well, there is almost no reason to pull my TF101 back out.


RE: fatal flaw
By Solandri on 7/25/2012 2:33:38 AM , Rating: 2
Correct. C'mon folks, tablets may be new, but the form factor isn't. A 7" tablet is just about the size of a paperback book - a very successful form factor for carrying around. As technology improves and the bezel shrinks, it'll be even closer to paperback book sized.

10" tablets are about the size of a small magazine (e.g. National Geographic). Which is why I think the market will eventually settle on 12-13" tablets - same size as a regular magazine or A4/letter-sized sheet of paper minus the margins. IMHO, the 9.7" iPad is the tweener. It's not as portable as a 7", not big enough to display a regular magazine or paper page at the same size as their physical counterparts.


RE: fatal flaw
By SPOOFE on 7/23/2012 5:59:27 PM , Rating: 3
quote:
10 to 15 inch ipad/laptop fits in a bag.

But a 7" tablet doesn't fit in a bag? I'm confused. What weird non-euclidian bags are you using? I want one.


RE: fatal flaw
By BladeVenom on 7/23/2012 7:12:38 PM , Rating: 3
Cthulhuian geometry FTW!


RE: fatal flaw
By probedb on 7/24/2012 6:02:40 AM , Rating: 2
There are lots of people that aren't you.

Some of us want a 7" tablet.

I don't really have anything else to say.


RE: fatal flaw
By bupkus on 7/24/2012 6:26:05 AM , Rating: 3
quote:
I are stymied.
I don't know about you but the 7" size fits perfectly inside my athletic cup. ;==)

Later that evening in the Bupkus household:

Wifey: "Honey, lets go or we'll be late."

Me: "Coming love cakes... just bringing my new tablet."

Wifey: <Rolls eyes>


RE: fatal flaw
By nafhan on 7/24/2012 3:04:31 PM , Rating: 2
I would say your arguments apply to the pretty well to the tablet market segment as a whole, but then kind of goes off the rails when you claim that 7 inch tablets are stupid while 10 inch tabs are perfect.

As far as the budgeting goes... just a guess, but I'd say there are a number of people who will save $100 because spending $100 more will not get them anything they want or need.


Silly
By EnzoFX on 7/23/2012 4:48:07 PM , Rating: 4
I don't know who takes Jobs' rants more seriously, the accused "sheeple" or the blind anti-apple anti-fanboys. Why not take his quote as face value? As they usually are. IMO it's relative to that place in time, technology changes, if 7" became viable then any company would consider it. Is this not stupidly obvious?

It's like getting caught up on those quotes that no one would ever need X amounts of KBytes of Ram. Oh boy were they stupid! Uh... They obviously meant is was outside their limited capabilities or outside the requirement of current solutions.




RE: Silly
By sprockkets on 7/23/2012 5:09:58 PM , Rating: 3
Face the simple fact: If Steve Jobs was alive there would be NO iphone that was not a 3.5" screen or a smaller tablet.


RE: Silly
By Tony Swash on 7/23/12, Rating: -1
RE: Silly
By Pirks on 7/23/2012 8:00:43 PM , Rating: 3
quote:
if Apple do launch a smaller version of the iPad they will crush the Google offering and make a profit doing so
Ya just like they crushed Android phone marketshare with iPhone... oh wait ;)))


RE: Silly
By EnzoFX on 7/23/12, Rating: -1
RE: Silly
By bupkus on 7/24/2012 6:14:42 AM , Rating: 2
quote:
they will crush the Google offering
Okay, now you've done it. "Crush"? I wait for the thundering crash of the apocalypse.


RE: Silly
By EnzoFX on 7/23/2012 8:34:22 PM , Rating: 2
No, you don't get it at all do you. Things change and evolve. Someone in his position speaks to that place in time. 3.5" was no viable in their opinion at the time. You can't honestly say what someone or some company would never do, that's idiocy.


RE: Silly
By Cheesew1z69 on 7/24/2012 7:56:26 PM , Rating: 2
Everyone gets it, apparently you don't. I am sure he said that there was no need for a bigger screen phone and smaller tablet. And if he were alive, I am sure it would still be that way.


Double Edged Sword
By KPOM1 on 7/23/2012 3:49:55 PM , Rating: 3
It looks like Google found a formula for Android that works. However, it is a double-edged sword for Android manufacturers. They can move lots of stock at $250 or below, but likely can't make much money on it. Google doesn't care, since they make their money elsewhere (as does Amazon). However, I'm not sure Samsung et. al. want to give away their devices. Samsung figured out how to make an Android phone at a high-end and profitable price point, and I'm sure they'd rather be competing at Apple's price point rather than Amazon's.

It will be interesting to see what happens if Apple really does release an 8" iPad.




RE: Double Edged Sword
By The Raven on 7/23/12, Rating: 0
RE: Double Edged Sword
By bupkus on 7/24/2012 6:35:08 AM , Rating: 2
quote:
If they would raise the price ~$50-100 for better quality control then I'd gladly get one.
I too would gladly pay more for a properly screwed tablet. Huh...????


RE: Double Edged Sword
By The Raven on 7/24/2012 2:29:11 PM , Rating: 3
http://www.pcmag.com/article2/0,2817,2407422,00.as...

What I mean is that from what I hear around the web is that they cut corners. If it costs an extra ~$50-100 for them to make sure those corners aren't cut, then I would jump. I don't want something that bricks out after a year.

I mean I appreciate what they are doing making tabs affordable for people poorer than I, but I also like options that are somewhere in between this and overpriced Apple stuff.


RE: Double Edged Sword
By MadMan007 on 7/23/2012 4:36:05 PM , Rating: 1
Samsung's 7" tablets are comparably priced when accounting for features.


RE: Double Edged Sword
By kreedaz on 7/23/2012 5:18:20 PM , Rating: 2
The "At cost" refers to Google, not the hardware vendor. "At Cost", to the hardware vendor in this case means they make money. They tell Google it will cost 249 dollars to make a Nexus 7. this 249 price includes the hardware vendor profit margin. If Google turns around and sells the tablet for $1000 or $100 dollars, the hardware vendor does not get any more money, nor do they have to give money back (in the event Google sold for less than 249.)


Lack of SD card slot kills it...
By eek2121 on 7/23/2012 9:07:42 PM , Rating: 2
No I'm trying not to be a snob here, but with the average movie being 500 MB - 1 GB in size, the nexus 7 REALLY needs an sd card slot. I have a 32 GB card in my phone that costed me $11. A far cry from the extra $50 that google charges. Sure they may make a 'tiny bit of profit' on the 16 GB model, but how much would they have made if they included an SD card slot instead. I just want a tablet that i can store the majority of my media (including movies) on.




RE: Lack of SD card slot kills it...
By bupkus on 7/24/2012 6:43:39 AM , Rating: 2
What's selling the Nexus 7 is relief from the lag and stutter that Jelly Bean brings, not the price alone. That was the only thing that I found made me think twice about Android.


RE: Lack of SD card slot kills it...
By bupkus on 7/24/2012 7:08:15 AM , Rating: 3
JB brings a seismic change to Android with finally a feeling of commitment by Google to a slick smooth experience best described by the word "quality" hither to unfelt in this OS.


ROFLMFAO!
By Denigrate on 7/23/2012 3:36:02 PM , Rating: 2
quote:
Well the success of its rivals reportedly has Apple prepared to tell its legion of loyal followers to get the sandpaper out and ready their fingers for a mini-iPad.


So funny.




Ha!
By room200 on 7/23/2012 6:44:40 PM , Rating: 2
When Apple comes out with a 7" tablet, I hope someone sues them for copying the form factor. I really hope some Android tablet maker has patented a "Rectangular thin client used to input data through a touchscreen of approximately 7" long with a black frame".




Since Mick doesn't read his posts
By TheJian on 7/24/2012 10:21:22 AM , Rating: 1
"The success of the 7-inch Kindle Fire, and now the Nexus 7 have reportedly alarmed Apple who is reportedly feeling pressure to release a "mini-iPad" early than planned."

Earlier? Try to get your errors down to 1/10 posts Jason, instead of 9/10...Getting old yet? Be thankful I only find half of your posts or less interesting :)




By Cheesew1z69 on 7/24/2012 1:08:49 PM , Rating: 1
Be thankful no one gives a shit what you think :)


7" is useless
By vision33r on 7/24/2012 5:33:42 PM , Rating: 2
I've had both the Color Nook and Kindle Fire, once I got the Galaxy Note. I was using the GN for everything and sold both the Nook and Kindle. Since then I got rid of the GN because it was too big and the SGS3 is perfect size. If I had to get another tablet it has to be a 10" to be really useful.




By The Raven on 7/23/2012 3:50:05 PM , Rating: 2
lol I had a quote from the great one at the bottom of the page...
quote:
"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer
Here is a more challenging proposition...outsell Android.


By Pirks on 7/23/2012 3:52:11 PM , Rating: 2
quote:
outsell Android
impossible with bing holding such a tiny ad market share, the bald one is screwed for now. if they ever take bing off the ground then possibly maybe


By The Raven on 7/23/2012 4:05:09 PM , Rating: 4
In the bald one's defense MS is the only one around who supported full-fledged tablets since forever ago. I am surprised that no one has stepped in to expand that space instead of just saying,"Oh look, everyone lowered their standards. We don't have to try to sell real computers anymore!"

As much as I dislike MS, this is a positive point in my eyes.
And I should know. I had a convertible HP tablet running Vista of all OSs and it worked great. Not as smooth as what iOS and Andoid are pushing now but on the other hand it was more than 5 years ago when I bought it and I could install normal programs instead of stripped down stuff made for a phone.


By jeepga on 7/23/2012 4:15:05 PM , Rating: 5
quote:
even if it was available today, i can think of no compelling reason to choose a microsoft tablet over the more established apple and android products


One word... Office.

I don't mean to be condescending, that means to talk down to, but you can use the Shift key (there is one on either side of your keyboard) to capitalize the first letter of the first word in each sentence. Your phone also has the equivalent of the Shift key if that's where you typed your reply.


By mellomonk on 7/23/2012 5:07:32 PM , Rating: 2
quote:
One word... Office.


Well that would be a reason, except Office for iOS and Android is expected to be released as part of the new subscription plans for Office 2013. Which should come out before the Surface uhh, 'surfaces'. There were quite a few tidbits about it in this past weeks Windows Weekly podcast with Paul Therot.

As sexy as Surface may be, they can not pass up the potential market for Office on the other Tablets. Surface is an interesting sideline, Office is a cash cow.


By jeepga on 7/23/2012 5:16:36 PM , Rating: 2
I'm not familiar with your source. CNET has a quote from an interview with Office President Kurt DelBene that contradicts what you said.

quote:
DelBene didn't specifically address when, or even if, Microsoft would release a version of Office for the iPad, the dominant platform for touch-based tablet computing. But he made it clear that Microsoft would give Windows tablets the first crack at what for many companies remains a must-have application.

Source: http://news.cnet.com/8301-10805_3-57474351-75/micr...


the real reason why google junk is "sold out"
By Pirks on 7/23/12, Rating: -1
RE: the real reason why google junk is "sold out"
By room200 on 7/23/2012 6:48:31 PM , Rating: 2
http://www.zdnet.com/blog/hardware/some-new-ipad-r...

Apple screen issues.

Also, don't forget the "you're holding it wrong" defense from Apple.


RE: the real reason why google junk is "sold out"
By XZerg on 7/23/2012 11:29:17 PM , Rating: 2
just because the other side has/had issues doesn't mean you don't. quit playing he said she said and face the facts. there is an obvious problem with the device and it needs to be fixed, not by moaning about how bad the other products are but by doing the right thing.


By room200 on 7/23/2012 11:50:17 PM , Rating: 3
I have one, and I have no problems. Do you? Then shut up.


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