I have no doubt that Google is working on some kind of “Nexus” tablet — they have to be. To say Android’s entrance into the tablet space has been a flop is a vast understatement. Google needs to get on top of this situation. And fast — Amazon, not Google, is leading now leading the “Android” tablet race.
With that in mind, it shouldn’t be too surprising to hear that Google may be targeting the Kindle Fire (and not the iPad) with any flagship tablet they make. While the source of this news is DigiTimes, which has a pretty awful track record when it comes to reporting this kind of stuff, on the surface this makes some sense:
The sources believe that Google will launch the own-brand tablet PC in March-April, featuring a 7-inch panel and Android 4.0 with a price less than US$199 to compete against Amazon.
The problem here is that Amazon is selling the Kindle Fire at or near break-even (they may even be losing money on each unit sold when you consider marketing, etc). And customers are getting what they pay for — a tablet of significantly less quality than the iPad.
If Google is going to undercut the $199 price, the hardware is either going to be shit — or Google is going to have to take a significant loss on each one sold. Maybe they do that and say they’ll make it back in search advertising. But there is real money they’re going to have to pay to an OEM to get them to agree to that.
If you consider Eric Schmidt’s quote from last month: ”In the next six months we plan to market a tablet of the highest quality.” — only the latter option makes sense here. There is no way Google releases a tablet of the “highest quality” and sells it for under $199 without taking a loss.
Or maybe Schmidt is just being overly generous in his definition of “highest quality”. Or maybe the DigiTimes story is total bullshit. Impossible to know right now.
What I do know: if Apple aggressively drops the price of the iPad 2 with the launch of the iPad 3, this is going to be fun to watch.