Virtually no profit in the Google Nexus 7

The Wall Street Journal reports on a preliminary estimate by UBM Techinsights of $184 for the cost of components in the new Google Nexus 7 tablet, which sells for $199. That barely allows Google to break even on direct sales, and it's losing money on sales through the channel. By comparison, UBM estimated that the Kindle Fire's cost of components was $153 last November. Specifications for the rumored Kindle Fire 2 are expected to be similar to that of the Nexus 7, and the component cost will most likely also be similar. However, Amazon could probably keep the existing Kindle Fire in the product line, at least as an interim product, at $149. At the same time, however, UBM's analysis suggests that the also-rumored 7" iPad is unlikely to be sold at $199, since Apple won't be able to make acceptable margins at that price. It's more likely to come to market between $249 and $299, if it ships at all.