Here is your margin
Google is making profits somewhere where you don’t really expect it. Last night we tried to order a Nexus 7 in the US to ship to a California and Google Play wanted to charge us 14 USD for second-day shipping.
The SA is a big country but again 14 USD is almost seven percent of the $199 tablet price. In reality if you ship hundreds of thousands if not millions you have to pay way less to the shipping company to have this stuff delivered. Our industry friends who are shipping tens of thousands of packages are paying only a few dollars for second-day shipping, which kind of puts things in perspective.
This is where the money gets made silently and even if Nexus 7 ends up in California or just about any other state, you will have to pay the state sale tax that currently in California varies between 7.25 and 9.75 percent, ending with roughly the same or slightly higher price.
Nvidia’s $199 Kai platform has to overcome margin issues at that price, so as you can imagine despite the previous reports, Google will make some money. As an end user you should not care that much, but analysts will definitely want to dig a bit deeper and find out the exact figures.
Still, at $199+$14 ($213) or $249+$14 ($263) the Nexus 7 it’s still probably the best 7-inch tablet that money can buy.