All Things D had a chance to sit down with Google Senior Vice President of Mobile Andy Rubin and ASUS Chairman Jonney Shih to talk about the Nexus 7. From the beginning, the target was $200, and it had to be high-end as set by Google. There was one issue, they gave ASUS 4 months to make it.
The effort was known as “Project A-Team” inside ASUS and during two occasions they had to add another 20 people to the project. They obviously worked closely with Google which gave them a 24-hour development cycle.
Shih said, “Building the Nexus 7 tablet was no easy task,” and Rubin said, “I don’t think there would have been any other partner that could move that fast. We went from zero to working product in four months.”
Rubin felt the lack of sales for Android tablets is because the ecosystem wasn’t there as far as movies, TV shows, and magazines. Of course the lack of tablet-specific apps has been an issue as well, and they continue to encourage developers to write single apps for both phones and tablets, but also taking care that the layout and button sizes are optimized for larger screens.
It’s obvious that Google felt that the only way to really penetrate the market was price. Rubin admitted that they are selling the Nexus 7 at cost. Amazon is doing pretty much the same thing with the Kindle Fire, but Google one-upped Amazon with better specs such as the Tegra 3 quad-core chip and a better display for the same price.
I still think it needs to hit retail stores in order to fully succeed and it looks like that will be the plan. Yesterday, they only announced plans for it to be available in the Play Store, but it looks like retail channels are in the works. We’ve already heard that the $249 model will hit UK retailers for £199. That’s good news.
I don’t think anyone can be surprised that there isn’t any profits in the Nexus 7 for Google, but the real question is what did Google do to other Android manufacturers? Other manufacturers are going to have to seriously adjust their pricing to compete. I sense a lot of companies may abandon tablets for now just like LG.