Google’s Nexus 7 is definitely out there to disrupt the tablet market and challenge Apple’s iPad, but when you crack it open, it looks very much like the insides of Amazon’s Kindle Fire.
That’s the impression that analysts at the research house IHS iSuppli got when they did just that: They took a Nexus 7 apart in order to see what components are inside, and to estimate what each of them costs. The early verdict is that the low-end eight gigabyte model of the Nexus 7, which sells for $199, costs $151.75 to build.
The higher-end 16GB model, which sells for $249, costs $159.25, the difference being the cost of the memory chips inside.
Andrew Rassweiler, who leads the teardown team at IHS iSuppli, reckons that Google will break even on the 8GB model, and will turn a tidy profit on the 16GB model. “Like Apple, Google realizes it can boost its profit margin by offering more memory at a stair-step price point. It’s getting $50 more at retail for only $7.50 more in hardware cost, which sends $42.50 per unit straight to the bottom line.”
The Nexus 7 is similar to Amazon’s Kindle Fire tablet in many respects, but it has some better features. For one thing, the Nexus has the Nvidia-made Tegra 3 processor as its main computing engine. It’s a four-core chip, meaning it has four main processing brains. The Kindle Fire has a two-core OMAP 4430 processor from Texas Instruments. TI, however, supplied two chips for the Nexus 7, one a power-management chip, the other a low-voltage transmitter.
But the Nexus 7, manufactured by Asus for Google, also has a better display, with a resolution of 1,280 pixels high by 800 pixels wide, versus 1,024 by 600 for the Kindle Fire. Rassweiler said the display uses a technology known as in-plane switching, and added $38 to the hardware cost of the Nexus 7, versus $35 for the display in the Kindle Fire, Rassweiler said.
The Nexus also has a camera that added $2.50 in cost to the Nexus, and which the Kindle Fire lacks. The Nexus also has a chip from NXP that supports near field communications (NFC), a close-range wireless technology that’s intended for wireless commerce transactions. Broadcom supplied GPS receiver chips to support mapping functions.
One other part caught Rassweiler’s attention: A gyroscope and accelerometer from InvenSense. While it’s common to see InvenSense gyroscopes, it’s rare to see it combined with into the same chip with the accelerometer. Both are used to determine position and movement of the device. The only other combined gyro-accelerometer seen before, Rassweiler said, was seen in Samsung’s Galaxy S III smartphone, and was made by the European chipmaker STMicroelectronics.
All told, IHS iSuppli figures that the Nexus 7 costs about $18 more to make than the Kindle Fire. But that’s likely to change soon. A New Kindle Fire with a better display arrives this fall.