Thursday, June 28, 2012

Google Brings Manufacturing Back To the US, Kinda


Source:  InquisitrGoogle.

Today, we learn that the Nexus 7 has zero margins.  I'm sure that isn't quite true.  But we'll get into that later.  The reason I mentioned it is because of the $300 price tag on the Nexus Q, Google's robust answer to its failed Google TV so far and competitors like Roku and Apple's Apple TV.  What is also interesting is that the Q is made in the United States of America.


USA.  Again, USA.  

According ot Inquisitr, Google had it made here because of cost - China was just too expensive.  Instead of being designed in the Californa and made in China like the iPhone, iPad, and Apple's other products, the Q was designed in the USA and will be made here as its tag.  

However, that doesn't explain the $300 cost much.  I think it could be about Google making no money the Nexus 7 or even its Galaxy Nexus phone.  The margin is bulked up on the Q.  By making the Q a companion device, Google basically shifted margin from one product to another.

It's likely to come down over time if Google cannot find folks to adopt it in the numbers that competing products are.  I would stand for a $150 cost.  And if I'm right and Q's price comes down to increase adoption or low sales of Q results if Google stands firm on the $300 price, Google will not make money but will be forced to adopt Amazon's Kindle model of selling hardware at cost and try to make it back on sales of apps and content.

Personally, I think it is great as a mobile warrior who loves companies to work hard, innovate, and compete for my hard-earned money.  I wouldn't mind seeing the Fire go to $150 myself.  On top of that, the Nexus 7 is already a crazy souped up tablet running the latest/greatest Android OS. That ain't something that the Fire can lay claim to.

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