Google Nexus 7 costs $159 to build

According to a tear down analysis performed by IHS iSuppli, Google and ASUS’ Nexus 7 tablet costs just $159.25 to construct, that’s for the 8GB model, whilst the 16GB model costs $166.75 to construct. This is significant because it means on the 8GB models Google makes a healthy $40 excess and on the 16GB models it makes about $80.

It was initially assumed that Google was selling the Nexus 7 tablets at a price which allowed them to break even or perhaps occurs a small loss which they would then correct with sales on the Google Play Store of things like books, films and games. However, the most recent breakdown shows this is far from the case, Google is making a handsome profit on both models, particularly the 16GB model where an extra $7.50 in costs result in an extra $42.50 in profit. You can see all the cost breakdowns in the graph below:

Although on the 8GB models Google’s Nexus 7 brings in less revenue than the Amazon Kindle Fire which makes approximately $60 in profit. The 7 inch IPS 1280×800 display is by far the most experience component at $38. The next most expensive part is the $24 touchscreen assembly and the $21 Nvidia Tegra 3 T30L chipset.

Its interesting to see how cheap the Nvidia Tegra 3 chip actually is, probably how the Ouya development team are able to get their Android console built for just $99.

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