Yesterday, Google released their very first line of self-branded tablets, the Nexus 7. One of the biggest selling points is its cool price tag, but the question is - how do they get the price so low? Easy... according to Andy Rubin himself, Google makes no profit off of the Nexus 7.
That's right, folks. Google makes $0 in profit off of hardware sales for this beauty. Google will focus on making money through content sales, rather than on upfront pricing. It's a risky move, but Google is confident it's the right one. According to an interview with All Things D, Andy Rubin said:
“When it gets sold through the Play store,there’s no margin, it just basically gets [sold] through"
In fact, Rubin said in the interview that Google is actually absorbing marketing costs for the tablet, meaning Google could theoretically end up losing money on each unit sale - depending on how the marketing campaign goes.
Rubin was asked if he thought this would put pressure on Google's Android partners, to which he replied, "“there is plenty of room left for Android tablet innovation".