Seeking Alpha

Google (GOOG) plans to roll out a branded tablet later this year to be priced at $150,...

Google (GOOG) plans to roll out a branded tablet later this year to be priced at $150, NY Post reports, undercutting the $199 price of Amazon's Kindle Fire. “It will cost more to build than it will sell for, which means Google will pay a heavy subsidy for its tablet,” an ITG analyst says. “There is no choice but to do that, if Google wants to compete.” GOOG +0.6% premarket. (previously)
Comments (2)
  • kmi
    , contributor
    Comments (4023) | Send Message
    Meh, I don't know about all the 'no choice' bit.


    Here's how I see it:


    Apple: sells hardware and designs a software solution around it. Needs margins on hardware.


    Amazon: sells kindle as a means to drive traffic to its far better margin products as well as directing traffic to its website which is the source of its business. Not focused on margins on its tablet.


    Google: using Android OS as a means to increase... ad revenues and keep folks in its ecosystem. Strategy: Losing a dollar on a tablet to make 20 in ad revenues by bringing users into its ecosystem. Doesn't need margin on hardware.
    28 Mar 2012, 10:41 AM Reply Like
  • TKO
    , contributor
    Comments (156) | Send Message
    Google's strategy to sell hardware below cost is akin to the game console market. If this strategy works, imagine the impact on smartphones... let alone Apple's margins.
    29 Mar 2012, 06:27 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio: