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June 29th, 2012
Google unveils $199 tablet, challenges Kindle Fire
Google on June 27 said it will sell a 7-inch, $199 tablet computer bearing its brand in a challenge to Amazon’s Kindle Fire.
The Nexus 7 is designed specifically for Google Play, the online store that sells movies, music, books, apps, and other content—the things Amazon.com Inc. also sells for its tablet computer.
Google’s announcement that it’s putting its brand on a tablet comes a week after Microsoft Corp. said the same thing. Both moves risk alienating Google’s and Microsoft’s hardware partners. Those companies, in turn, could be less inclined to work closely with Google and Microsoft.
The Nexus 7 and the Kindle Fire both have screens that measure 7 inches diagonally, smaller than the nearly 10 inches on Apple Inc.’s popular iPad. The Nexus 7 also will be light—at about 0.75 pounds, compared with the Kindle Fire’s 0.9 pounds. The iPad weighs 1.44 pounds.
The Nexus 7 will ship in mid-July starting at $199—the same price as the Kindle Fire. By contrast, iPads start at $499. Customers in the U.S., Canada, and Australia can start ordering it now through Google.
Google’s price is aggressively low, considering that the Nexus 7 has more features than the Kindle, including a front-facing camera. The Kindle is believed to be roughly breaking even at $199. Samsung Electronics Co. sells a tablet similar to Google’s for $250.
Andrew Rassweiler, an analyst with IHS iSuppli, said he suspects Google will be subsidizing the tablet to sell it starting at $199.
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Google has previously put its own brand on a flagship line of “Nexus” smart phones. But that market is more mature than the tablet market, and there was less risk of Google alienating partners, particularly because it didn’t price the phones lower than the norm.
Much like the Nexus phones, the Nexus 7 tablet will be a showcase for a new version of Google Inc.’s Android operating system, in this case one called “Jelly Bean.”
Although the tablet carries the Google brand, the machine will be made by AsusTek Computer Inc. Google recently expanded into the device-making business with its $12.5 billion purchase of Motorola Mobility, but the company has stressed that it intends to continue to rely on Asus and other manufacturers that have embraced Android.
Microsoft’s announcement of its Surface tablet last week and Google’s Nexus 7 add up to a “troubling” situation for tablet makers such as Samsung Electronics Co., said Jeff Orr, an analyst with ABI Research.