Google (NASDAQ:GOOG) just announced it's bringing it Nexus 7 tablet to Japan, where it hopes to sell 11 million units a year by 2015. The announcement marks the perfect time to consider the Nexus 7 supplier winners.
The tablet market is increasingly combative.
Mobile is the future. If we've learned anything from watching Apple (NASDAQ:AAPL), listening to Facebook (NASDAQ:FB) and tracking Google, it's that the mobile ecosystem is where the tech bacon will be earned in the coming years.
This has created a lot of tension in Cupertino, where Apple has its headquarters, and Mountain View, where Google sets up shop. The two were close cousins in the quest to dethrone Microsoft. And, with the mission accomplished, they're becoming increasingly cagey about their relationship.
Apple fired the latest missive, cutting Google Maps from iOS 6. Previously, it also jettisoned YouTube. And, plenty of market watchers wonder how much longer Safari will default searches to Google. But, don't cry any tears for Google. They saw the writing on the wall.
After all, the quest to conquer mobile eye share was behind Google developing the Android operating system and eventually acquiring Motorola Mobility.
Make no mistake, Google knew the Apple relationship would sour and took steps to ensure it could still hang its hat on mobile search when it happened.
Which brings us back to the Nexus 7.
Apple's iPad dominance wasn't lost on Google either.
Google had little interest sitting on the sidelines watching as laptop market share migrated to tablets, taking precious ad revenue with it.
But, with Apple controlling 70% of the tablet market, Google also recognized it had some catching up to do if it wanted to protect share as vehemently as it did with smartphones. The Nexus 7 was born from this need to shore up Google's ad ecosystem.
Projections for Nexus 7 unit sales this year were initially modest, at a bit better than 3 million. But, with aggressive pricing and solid reviews, it's more likely Google will ship 6 million or more units this year instead.
Nexus 7 Suppliers benefit from unit upside.
According to the iFixit teardown team, the device is powered by Nvidia Corp's (NASDAQ:NVDA) T30L Tegra 3 processor, which competes against Qualcomm's (NASDAQ:QCOM) Snapdragon line, as well as home cooked processors at Apple and Samsung (OTC:SSNLF). The Tegra 3 comes out of the box running at 1.3 GHz. However, it's been hacked up as high as 1.8 to 2 GHz, which shows the Tegra 3's potential.
The GPS chip, which handles tracking and navigation, is supplied by Broadcom's (NASDAQ:BRCM) BCM 4751 integrated monolithic GPS receiver.
Power is handled by Maxim Integrated's (NASDAQ:MXIM) Max 77612A inverting switch regulator.
Texas Instruments (NASDAQ:TXN) supplies its SN75LVDS83B LVDS LCD display driver, which makes all that wonderful content come to life on the screen.
But, Google is likely the biggest beneficiary of higher unit volume, but not because of device revenue.
Instead, it's because of the larger installed base driving search revenue. Since the Nexus 7 runs on its own Jelly Bean 4.1 operating system, the company is able to optimize - and therefore monetize - user web traffic.
There's plenty of market to carve out in the non-iOS space. Google's Nexus could very well be positioned to grow over time to double digit market share. If it does, Google and its supply chain will benefit from unit and revenue growth.
Disclosure: I am long AAPL, QCOM, FB. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.