Los Angeles, CA

With Nexus 7's relatively affordable price, IHS iSuppli conducted a study to determine how much money Google is actually going to financially profit from its tablet offering.

Tech website AllThingsD first reported the findings of IHS iSuppli which concluded that Google stands to profit very little from their 8GB Nexus 7 model. Its 8GB model costs an estimated $152 to build. Meanwhile, Google can significantly profit from its 16GB model because it costs around $159.25 to build -- almost a $100 gain compared to a $47 gain for each 8GB model sold.

Google's announced its foray into the tablet industry a couple of weeks ago with its unveiling of its Android powered Nexus 7 tablet. The Internet search giant's entry tablet is priced at a cheap $199 for its 8GB model and $249 for its 16GB model. The Nexus 7 is positioned to compete directly against Amazon's Kindle Fire tablet.

While many notice only subtle differences between the Nexus 7 and Kindle Fire, Google aims to not only cut into the market share of Amazon in the tablet industry but also to gather third-party developer support.

Apple is still the company everyone is catching up to in terms of tablet market share. Its iPad is the standard for tablet performance and design. But similar to all Apple products, the new iPad can clean out your wallet with its $499 price tag.

Google and Amazon's smaller and cheaper tablets provide consumers with choices and alternatives. Perhaps Apple is also sensing the shift from pricey tablets to more affordable and portable ones because rumors are swirling that they plan to release a smaller version of the iPad called the iPad mini.

Whether true or not, Google's decision to release the Nexus 7 tablet was enough to concern even the biggest of tech companies.

 

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