Google charges hefty premium for 16GB Nexus 7 storage

By Bill Detwiler in Cracking Open, July 12, 2012, 6:53 AM PST // billdetwiler

Nexus 7 hardware cost breakdown shows that Google charges a $50 premium for $7.50 worth of extra storage.

Nexus 7 buyers who opt for the 16GB model are paying a premium for all that storage.

IHS iSuppli, a hardware research and market analysis firm, performed a cost breakdown of the components inside the Google Nexus 7.

According to their analysis, the entry-level Nexus 7 has a $151.75 bill of materials (BOM) and costs $7.50 to manufacture. The unit's IPS display and touchscreen are the Nexus 7's most expensive components at $38 and $24, respectively. Other big-ticket items include the Nvidia Tegra 3 processor at $21 and the battery at $12.75.

Then there's the memory. According to IHS iSuppli, the base-model Nexus 7's 1GB of RAM and 8GB of flash memory cost just $13.50. The top-end Nexus 7's 1GB of RAM and 16GB of flash memory cost $21. Therefore, the extra 8GB of storage is worth $7.50.

Given that buyers pay an additional $50 for the 16GB Nexus 7, Google earns a $42.50 premium on the additional storage.

Of course, Google isn't the only company to use extra storage capacity as a way to boost their bottom line. A similar analysis of the 2012 iPad revealed that Apple charges and even higher premium for its high-end tablets.

About Bill Detwiler

Bill Detwiler is Managing Editor Tech Pro Research and the host of Cracking Open, CNET and TechRepublic's popular online show. He was most recently Managing Editor for TechRepublic Pro. Prior to joining TechRepublic in 2000, Bill was an IT manager, d...

14 comments

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Computer Dave

The bump to 16mb is completely worth it since Asus/Google decided I didn't need a slot for a micro SD card.

_Papa_

Google can put whatever markup they want on their product. It's called free enterprise. If you feel it costs too much, don't buy it.. After all, you've lived this long without it!

Computer Dave

So what if Google makes a couple of dollars on the N7? That is why they are in business. Now if they were charging $100 more for the additional RAM then we could complain about gouging. Compared to many other tablet price jumps for the extras, Google is damn-near giving it away. So they're making just under $50 on the base model and just under $100 on the upgrade. Any business that can't turn a profit from their product won't be in business for long. And no, it doesn't matter that Google rakes in billions from their other services - they do not exist to subsidize other parts of the company. I pre-ordered my Nexus 7 before the Keynote Speech was over and I'm looking forward to getting it in my hot little hands!

dl_wraith

.......vote with your wallets. The fact we haven't done this with other well-marketed products (like the iPad) means the companies involved keep their pricing high. Why lower the amount of money you charge when people seem happy to pay it, right? If companies don't make good profits they can't reinvest and research newer, better products. If Google, Apple et al sold things for just a touch more that they cost to make you'd only see new products once in a blue moon. Companies are in it to make money - they aren't charities. We, the consumer, are in control of the situation though - if we don't like a company's products or pricing plan we simply shouldn't buy that company's products. Apple, for instance, have never had a penny from me. I find their products less than adequate for my needs and I hate their pricing. I have a choice.

Orld

$250 for a tablet like that? It's a steal. Or you can buy a iPad for twice the amount and lesser hardware...

buck_lane

it costs them $x dollars to make, so selling it at anything above $x is greedy, they are trying to rip me off! seriously though, stfu and buy your cheap ass tablet

Kevin Morrison

I get a charge out of how everyone makes it look almost criminal when a company sells its products at a profit. I say to those people, if you don't like it, start your own company and see how you will end up looking at your bottom line. To compare Google to Apple in this respect is not even fair to Google. If we look at all the services they offer for free as well as the other things they do for us, there is no way you can compare them to the likes of Apple. Who has only looked out for themselves since day one, offering inferior products at grossly higher cost, with piss poor support and costly upgrades.

rfolden

Apple charges an inordinate amount of coin for every tiny step up in storage capacity. SSDD.

Albert Myles

Considering Google is definitely going to take a loss (or at best break even) on the lower version(after marketing, legal, etc) seems OK that they are building in a profit like that.

Fyrewerx

Lessons in Greed. Steve J. would be proud.

dl_wraith

....but profiteering is. Companies can pretty much price how they like as long as they aren't taking the mickey out of the customer with astronomical mark-ups. Companies that are openly contemptuous of their customers don't tend to last long when there's alternatives on offer. That said, Apple seem to be the exception that proves the rule in this case :( The power of Marketing? Or the last arcane spell of Jobs before he ascended?

Orld

0 from me to Apple as well...about to get a Galaxy Nexus or Galaxy S III

Orld

If joking or trolling...