So the Nexus 7 launched yesterday for $199 and I've spent the last day reading reviews instead of doing anything productive. Can't blame myself too much though—a brand new 7-inch tablet that undercuts the iPad by $300 is worth paying attention to.
I'll be honest, I was skeptical when Google announced this thing at I/O back in June. Another tablet? We don't need another tablet. The market's already crowded with iPad competitors that nobody buys. But $199 with a quad-core processor, 7-inch 1280x800 screen, and a legitimate app ecosystem actually changes the math in a way I wasn't expecting.
The specs are respectable. Tegra 3 processor, 1GB of RAM, 16GB of storage (or 8GB if you want to go cheaper, apparently). It's not going to beat an iPad on raw performance (no Android tablet does right now), but it's not embarrassingly slow either. What impressed me most reading through initial reviews is that this doesn't feel like a clearance-bin product. It feels like Google actually thought about what 7 inches should be and built accordingly instead of just shrinking an iPad knockoff.
Here's what nobody really talks about though: the margin on tablets is ridiculous. Apple's making money hand over fist on iPad hardware even at that price point. Google's doing this at $199 which means they're either eating massive losses per unit or they've gotten manufacturing costs down to a place everyone else should be embarrassed about. Probably both. The fact that they can do this tells you exactly how much fat is in the Android tablet market right now.
My bigger question is whether this actually matters. Kindle Fire proved you can sell a cheap tablet if you price it right, but sales have been... underwhelming. Amazon's mostly using it as a Trojan horse to sell books and video rentals. Google's doing the same thing basically (selling hardware at cost to push Play Store content), but at least they're being more honest about it.
What kills me is that Google couldn't just say "we built this for developers and power users" or something more interesting. Instead we get the usual corporate speak about "opening up tablets" and "premium experience at an accessible price." That second one especially makes me want to throw something. It's marketing nonsense. You know what's a premium experience? An iPad. This is a good value at $199. That's not the same thing and we shouldn't pretend it is.
Still. $199. You can't get anything else that functional for that money. My coworker Eric asked me yesterday if it was worth buying instead of a Kindle Fire, and honestly I couldn't give him a straight answer because it depends entirely on what he actually wants to do with it. For casual web browsing, reading, and watching Netflix? The Fire's fine. For someone who wants an actual Android device without the smartphone commitment? This is the thing. Finally.
The real conversation here is about what happens next. Amazon didn't really crack the tablet market with Kindle Fire. They sold a lot of units early (people love cheap hardware), but did they convert any of those people into long-term customers? Not sure. The ecosystem around Fire is basically locked into Amazon's own services. With the Nexus 7, at least you've got access to the full Google Play Store, which isn't perfect but it's infinitely better than Amazon's limited selection.
I've been using Android since the T-Mobile G1 came out back in 2008, and I've watched Google struggle to figure out tablets basically the entire time. Remember the Xoom? Or whatever that Motorola thing was supposed to be? This might finally be the moment they get it right, not because the hardware is revolutionary (it's not), but because the price is low enough that people will actually buy it and try it. And maybe once they do, they'll realize that Android doesn't suck as much as they thought when they tried to use it on a phone with a 3.5-inch screen.
I'm not rushing to buy one immediately (I've got enough devices gathering dust already, including a first-gen iPad that I barely touch anymore), but I'm curious to see how this shakes out over the next few months. If Google manages to move real numbers, we might actually see iPad pricing come down, and that's worth something even if you never buy the Nexus 7 itself.
The question is whether Google has the patience to stick with tablets long enough to build something meaningful. That's always been their problem.