Impressive.
From the marketing video it looks like Android 4.2 gained Swype-like keyboard.
It seems that they're no longer using tablet UI, even on Nexus 10 (i.e. it has status bar on top, navigation buttons are in the middle of the screen). That's weird, and I definitely don't like it, but it might not be that big of a problem.
Back in June... and only for the $199 model...
http://www.isuppli.com/Teardowns/News/pages/Low-End-Google-N...
Sure, if you add in the $25 Google play credit, and leave room for some margin for Asus (since Google is just a reseller), you might get close to breaking even, but as far as I can find, the Nexus 7 was never sold at a loss.
They also get a much higher profit margin on the 16gb (now the 32gb for the Nexus 7) than on the 8gb which is what a lot of people will buy. There isn't a $50 cost in manufacturing a device with 16gb more of storage but there is a $50 markup for the customers who want more local storage. Storage is much, much cheaper than what you're paying for when you buy a tablet or phone with bigger SSDs. The profit margins on the 64gb iPhones are INSANE compared to the profit margins on the 16gb.
The base, $300 Nexus 4 is going to have a paltry 8gb. Most of the heavy users are going to spend the $50 more for the 16gb, while the $300 will still be there to please those who have to be more careful with their money.
Other companies must sell their devices to make a profit, google does not. As long as they are close to making even on device cost they can make up for and exceed it elsewhere.
Although Google's profit's are in the billions, so are their users. Their profit per user is actually pretty small to be running an at a loss hardware device.
And we can't pretend that people don't use their ecosystem on other devices anyway.
I honestly have no clue at what Google are trying to achieve sometimes. I mean it makes sense for Amazon, but Google? Not so much.
Apple's gross margins on its devices, essentially the selling price less the manufacturing costs, is about 30-40% company-wide. That translates into an operating margin (which includes all costs) in the 20-30% range.
That's high for a consumer electronics company, but not as high as the $700 - $175 comparison makes it sound.
Of course there are other expenses (those $10M Apple Stores don't build themselves), but you're incorrect about the operating margin. For Q4 2012 AAPL had an operating margin of 34% (gross margin was 40%).
That's been Apple's strategy forever, people who want more have to pay a lot more than what it's really worth. I can remember the entry level iBook (during the PPC days) being sold with goddamn combo DVD reader/CD writer drives in a time where EVERY SINGLE PC LAPTOP SOLD, even the cheapest crap, had a DVD writer. Just to push people onto the higher profit margin.
I love Apple products but they really know how to milk their customers dry. Hacker News's audience wouldn't fall for that, but I can remember the markup on ram, when they still sold devices with 1 or 2gb of ram when the competition had 4gb on their cheapest stuff, with huge markups on the online apple store if you ordered a laptop with more ram. People here know how to put more ram in their computers and know not to order a macbook with "Apple's ram" (... a traditional thing that is going to die with the retina mbp and its soldered ram), but the average joe just got ripped off hardcore.
If you only look at their entry products, like the 16gb iPhone, the 21" iMac, the 11" MBA, yeah, Apple seems reasonable. Any other Apple product ? the margins on those things is something no one else could pull off without getting lynched.
The point of my post wasn't to defend Apple, it was to show that comparing the selling price and bill of materials figures to highlight profit is simplistic and wrong. What actually matters is gross margin and operating margin, both of which are made public so there's no need to refer to the estimated BoM as the OP did. This applies to all companies, the all-too-common misunderstanding of BoM figures is a pet hate of mine.
Apple completely changed the way I look at mobile devices. My first smartphone and tablet were the iPhone and iPad. I just wish they'd be more reasonable on some points, but they're obviously too successful to change their strategy unless a strong competitor shows up (and I hope that Google's strategy with the Nexus pays off).
I also am part of those who switched to Android but think that Apple had some reasonable arguments against Samsung that made them go wild against them. When you go as far as to make the charger look like an Apple charger you know there's something wrong going on. Samsung clearly tried to ride on the popularity of Apple products by making it look as much as possible as the iPhone and iPad, be it in the packaging, included accessories, look, early TouchWiz releases... there's a reason why TouchWiz on the S3 isn't like TouchWiz on the first Galaxy phones.. The customization on early Samsung android devices went too far toward Apple's direction. Even the "hardware" buttons, making the home button prominent and the other two android buttons more invisible in the design, and still keeping the home button as fully hardware on the S3 rather than going onscreen or capacitive like the other android OEMs.
Apple makes great products, but I feel like they're trying too much to milk us as much as they can.
I agree though, Apple's price discrimination may be understandable but as a customer it can really grind sometimes. When I went for an iPad I decided on the 16GB model for cost reasons and regretted it ever since, but the price jump to the 32GB was big enough that I shied away from it. It was annoying that the premium for a component that cost a fraction of what they charged created an uncomfortable dilemma for me that as a customer I shouldn't really have faced.
In all I'm excited about the level of competition, with MS's Surface bringing in another interesting angle, and I hope it continues for a long time. For one, though I have an iPad already I'm pretty sure I'm going to be picking up a Nexus 7 soon.
This is a pretty common case of price discrimination. http://en.wikipedia.org/wiki/Price_discrimination
Apple is certainly not the only company that does it. However they do commonly have a higher profit margin than their competitors.
"ZTE U950 smartphone packs a 1.3GHz Tegra 3 chip, 1GB of RAM, 4GB of internal storage and a 2,000mAh battery beneath the 4.3-inch display."
That is not a good situation for either Android or Google - and except Google breaking the price, there is little else that can revive the market a little bit.
She's hugely disappointed with it and refuses to buy any more Samsung products. (It doesn't help that she refuses to let me root it and install CyanogenMod, but you don't expect to have to do that if you're paying the equivalent of over $600 US for a phone)
I know that Asus Transformer Primes sold in China did not come with Google services, either, though buyers quickly learned that using a US/Taiwan/International update file would restore functionality fairly easily.
If Google are determined to sell high quality devices at cost to gain market share, and can make the general public aware of this (non-trivial), Apple may find itself as the sole company making big profits from actually selling phone hardware.
That said, only Samsung with their Galaxy brand have come anywhere near the marketing impact of the iPhone, so if Google really want to make an impression, they're going to need market these devices at a level that they've never managed before.
It's Samsung's own fault they haven't got the 4.2 update out properly yet.
On the other hand, it doesn't support LTE. When will Google realize that basic things like fast network speed are more important than fancy things like face unlock and NFC.
You are going to burn through your data alotment very, very fast.
Mobile bandwidth is still expensive, so you only get a couple of GB per month for a decent price and if you want more, you have to shell out a lot of cash.
I don't know how it is in the US, but here in Europe (at least in my country, Romania), the 3G connections are pretty good and 4G is coming, but it's not there yet.
And I can't picture what you'd want to do with an expensive 4G connection. With my 3G connection I can watch Youtube videos just fine. But it really does work at around ~ 20 Mbps (HSPA+), which is like ~ 2 MB/s, so if I'm not careful, I can burn thorough my 5 GB plan in a couple of hours. And from personal experience, few people have more than 5 GB of monthly bandwidth.
At home I have Wifi, at work I have Wifi, all the coffee-shops I go to have free Wifis for clients, most hotels have Wifis too. The only instances where I use my 3G connection is when I commute between places or if I end-up with a shitty Wifi connection and in such instances I just browse the web casually, or read email, or read Twitter/Facebook updates. Which is what most people do.
The only heavy-usage of my 3G connection has been for Skype. But Skype works surprisingly well for me over 3G (YMMV of course).
Except you then go on to explain for a couple paragraphs that it doesn't matter BECAUSE <insert a ton of active device management>.
Here is my process for connecting with my LTE phone: I turn it on. Speed is as fast as WiFi all the time. I have a 6GB plan and have never had to worry about hitting it. That's it.
I haven't used a free WiFi network outside of work in a year. LTE is way faster. Just like the touchscreen on the front of the phone, you don't know you want it until you have it. Then, you'll never give it up.
Latency is as low as 2ms. I never have latency problems on LTE.
I have unlimited data and a ROM that lets me tether, and it really is amazing how useful LTE everywhere is. There's no way this isn't the future of internet connectivity in general. (Unless everyone using it would somehow saturate the available spectrum?)
HSPA+ can run at 42Mbps in theory, but network congestion makes that a pretty much impossible situation in reality.
As more people join the LTE networks, they will get slower and slower, just as 3G has in crowded areas.
With the LTE speed of 70mbps, you could use up your 6GB in 11 minutes.
It's not about how long it takes to run a download of a media file, you're completely missing the point. It's about the drastically improved latency and responsiveness in downloading complex modern web pages, streaming, and caching stuff.
For example, The Verge homepage is almost as big as a song. If the question becomes do you need to make every page load .5 seconds instead of 2 seconds then "yes" wouldn't seem so ridiculous.
Why would I do that kind of sustained downloading on my phone? That's what the server & home internet connection is for. LTE on the phone isn't for blowing through 6GB In 11 minutes, it's for grabbing the data you need as quickly as possible.
This month I've been following the Coursera course on functional programming with Scala, while listening to other podcasts and stuff I follow. I like doing that in the morning, while drinking a coffee at a nice place. And because I wasn't careful about turning Wifi on (it was off for some reason), I depleted 2 GB of bandwidth in 2 hours, which was the bandwidth I had left - the connection was so good I didn't even realize that I was on 3G.
Also, I'm probably in a much better position than most people, because my monthly plan does not come with a contract, being a PrePay (PrePay plans are very competitive in Europe, especially Eastern Europe, compared to the US at least). So I can recharge as needed.
But other people are not so lucky and once you blow past the allocated bandwidth, the prices are freaking huge on a contract. I have an acquaintance who's kid watched movies on his phone and ended up with a 300 EUR bill.
So btw, if you're telling me that you don't do device management, just wait until you'll be a father.
The lack of LTE won't be a dealbreaker for most people, and probably even those who live in the USA. $300 hits the right price point for a flagship phone and the upside of owning a nexus and getting Google's support is huge. I'd rather get an iPhone than an android that is not a Nexus. Both OS are constantly evolving and getting better, waiting for the carriers and OEM to get their shit together is getting old.
So for now, having paid only slightly more for my sim-free S3 months ago, it's not that good a deal.
Still patiently waiting for a nexus with a hardware keyboard like the good old days...
I see SIM free S3's selling for around the £500 mark. How much is the slightly more?
After taking 20% VAT into consideration, that's only a x1.07 premium compared to the US price as compared to a x1.23 premium on the Chromebook, which is actually unusually good. Often we see dollars converted directly to pounds.
Strange that the conversion is not consistent - can anybody speculate why?
Impressive indeed!
Edit: I meant rear facing on the Nexus 7. Not front facing.
Any kid that has a parent that would buy them a Nexus 7 has at least a feature phone with a camera that'd be as good as what you could put on the N7, if not better.
The new iPad mini has a good camera but also an obnoxious price. It may be that refurbished iPad2 or even iPad 3rd gen are a better deal.
Yeah you're right, why would someone want something that can achieve 9 hours screen-on battery life when they could just be content with killing the phone battery and taking the risk of not having enough juice left for an important/urgent phone call. There's also a huge difference between a 4" screen and a 7" screen, you don't really know how much until you've used both. The smartphone is good for quickly checking your mails and stuff like that, but the Nexus 7 is much nicer for browsing the web, gaming, reading ebooks.. reading books on a smartphone is not an enjoyable experience, but doing so on a Nexus 7 is. My experience with the Nexus 7 has also shown me that it's at the sweet point for a small comic/manga reading device. Any smaller and you can't really comfortably do that. Any bigger (like when I had the iPad 2) and it can be a bit too heavy depending on the way you hold it for prolonged use.
The smartphone can be a quick fix when you're not at home and not carrying your tablet (I don't carry my tablet all the time) but at home there is absolutely no way you'd chose to use the smartphone over any tablet, be it 7" or 10", when you're reading ebooks, browsing the web on the couch or watching movies in your bed.
Samsung did try to make a device that can be somewhat good at both, the Galaxy Note 2, but it's not really pocketable so it loses the appeal of a smartphone, and it's not as nice as a Nexus 7 for tablet use cases.
Maybe this is for consistency. I find it a bit of a mental shift when I used the Nexus 7 with the tablet UI. I assume I'd prefer the status on top look & feel on the Nexus 10 as well. I know not everyone prefers status & notification on top, but I'm used to it and I like the consistency of it across phone & tablet.
I would think though that sticking the navigation buttons in the center while in landscape mode would be aggravating. I would rather have the buttons rotate while the bar stays on the narrow end. That would even be consistent with the actual phone UI.
Good catch. This will hopefully be configurable on custom ROMs, as I'm with you on this one: I don't want this on my 10" tablet.
The 16 GB version is $399.
That would be a really bad mistake...