Nexus 7, a wolf in sheep’s clothing for other Android tablet makers?

July 18, 2012
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The Google Nexus 7 is right now one of the most popular 7-inch tablets out there, and considering it’s a Nexus-branded device ready to offer buyers a pure Android experience, it will probably become one of the best sold tablets of the year.

Google is yet to mention sales numbers for the device that started shipping last week and which is currently sold out with certain third-party retailers, but Digitimes reports that according to “industry sources” the Search giant may ship as many as 2.5-3 million units this year.

That may not seem like an impressive number, as the tablet is only available in a limited number of markets right now, but will Google hurt its partners when it comes to overall tablet sales and profits? The Nexus 7 doesn’t, and can’t, target the iPad – Apple is expected to sell tens of millions of iPads each quarter – but instead it’s meant to compete against the Kindle Fire, a product Google can’t afford to ignore.

Amazon’s tablet became popular with the crowds because it’s an affordable device, ready to offer a good enough experience for that price, not to mention access to the company’s digital content stores.

Google has adopted the same model, selling the device at cost, hoping to prevent users from jumping ship to Amazon and have them immersed in an improved Google Play environment instead. But while Google can sell the Nexus 7 without making any profits because users would then spend more money in its digital stores, other Android makers won’t be able to enjoy the same perks.

And they won’t be able to come up with similarly priced devices ready to offer a similar experience. Google did say that’s plenty of room left for innovation in the tablet environment, implying that its product will not hurt tablet sales from its Android partners, but the fact is that each Nexus 7 buyer is a customer that may have chosen an Android tablet from a different OEM. At the same time, that customer may have chosen the iPad too, so having him or her purchase a Nexus 7 instead is a better alternative for Google.

But, and I’ll say this again, Apple may sell as many as 30 million iPads by the end of the year (that’s a guesstimate from my part), that’s not counting what it has already sold in the first two quarters. And Apple did not cut the price of its tablets once the Nexus 7 launched. And Apple also has its digital stores in place that can be accessed almost in full in more markets that Google Play is available in, which means Apple too can make plenty of money off of its digital offerings.

Meanwhile, other Android device makers will have to suck it up, and fight even harder for a piece of the (Android) tablet ecosystem. The same Digitimes reports that various OEMs including Samsung, Asus and Acer, have started to cut the prices of their tablet offerings in order to better adapt to the new competition from Google’s tablet:

Samsung, which enjoys a high level of brand recognition, cut slightly the prices of its tablets in order to cope with increasing competition and to pave the way for the launch of its own new models.

But for Acer and Asustek Computer, they seem to have adopted the same strategy of lowering the prices of their 10.1-inch models to the levels close to those quoted for 7-inch models by Google or other rivals in order to attract consumers.

So is the Nexus 7 a wolf in sheep’s clothing for the Android tablet ecosystem? We’ll be able to better asses that in the following months when we’ll find out more details about tablet sales from the most important players in the business.

Finally, there’s also one more negative effect of the Nexus 7 that we can’t overlook – the iPad mini. Apple was rumored since last year to be working on a 7.85-inch iOS tablet, but the company didn’t make it public. Then the Kindle Fire appeared and the Google Nexus 7 rolled out seven months later revealing that there’s a certain share of the population that’s interested in purchasing cheaper tablets – but not the very cheapest, as there are various cheap Android tablets from unrecognized brands that don’t enjoy the popularity of the Kindle Fire or Nexus 7. And that could be a good enough reason for Apple to launch its smaller iPad this fall/winter. Android tablet makers will then have to fight against the smaller tablet as well.

What tablet are you buying this year?

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