The Fire turns to Ash
David is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Vic Gundotra had a Taylor Swift interruption from Sergey Brin, there was sky diving and a $1,500 dollar pair of glasses from the future that none of us can buy. However there were some more down to earth announcements from Google (NASDAQ: GOOG) on the first day of their Google I/O conference. One of the larger announcements was the Nexus 7 tablet from Google. The Nexus 7 is Google’s answer to the iPad, Kindle Fire and all of the so-so Android tablets that have been released in the last few years. Much rumored and leaked, the Nexus 7 will serve as a reference tablet for developers and hardware manufacturers, just as the Nexus phones do.
Manufactured by Asus the Nexus 7 will be highly competitive on price, hardware and the operating system. Under the hood there’s an NVidia Tegra 3 quad core processor complimented with a 12 core graphics processor, giving the Nexus 7 bleeding edge processing power. The Nexus 7 has a 1280 by 800 seven inch HD display and a front facing camera, though it does not have a rear facing camera. It has Wi-Fi, Bluetooth and NFC, there are no 3G/4G models. Google also claims that the Nexus 7 will get 9 hours of battery life and 300 hours of standby.
The sales pitch for the Nexus 7 is that it was built for the Google Play store. There is a new interface for the Play store that is somewhat of a cross with the interface of the Kindle Fire and Windows Phone 8. Google is also pushing a premium magazine reading experience on their Nexus 7 tablet. The Chrome web browser is built in as the standard browser and the Nexus 7 features excellent YouTube, maps and gaming functionality. Shipping in mid-July the Nexus tablet comes in two variants an 8GB model for $199 and a 16GB model for $249, neither feature an expandable memory slot. They will also come with a $25 dollar credit to the Google Play store and be bundled with some content like the Transformers movie. And of course the Nexus 7 will be the first Android tablet to ship with Android 4.1 Jelly Bean, though the Xoom is supposedly also getting an update to Jelly Bean in July.
The Nexus 7’s most direct competitor is Amazon's (NASDAQ: AMZN) Kindle Fire. The Fire runs a modified version of Android 2.3 Gingerbread that has all the Google services and content stripped from it, replaced with Amazons own. The Fire is priced at $199, has a dual core processor a 7 inch screen and no cameras. The main selling point of the Fire, aside from its price, has been its content ecosystem, provided by Amazon. The Amazon ebook, movie, TV and music services are all at this point more complete than what Google can offer on the Nexus 7. Additionally Amazon has a cloud storage offering and an app store to compete with Google’s.
However the Nexus 7 is a more powerful device at the same price with the latest version of stock Android, directly supported by Google. Google also spent a large amount of time during their keynote upselling the content that was available on the Nexus 7. They talked about YouTube, their new premium magazine service, movies, TV shows and even a new Google + app. Google is definitely trying to sell their content as a plus with the Nexus 7, and though Google is not there yet they made it clear that content is king.
Apple (NASDAQ: AAPL) shipped nearly 12 million iPads in the first quarter of 2012 and surged to 68% of the tablet market globally. The Kindle Fire fizzled from 17% to just 4% of the tablet in the first quarter with just 700,000 units sold, according to IDC. Apple recently took the small step of continuing to sell one model of the iPad 2 when they released the iPad 3, or the ‘new iPad.’ The iPad 2 is priced at $399, a $100 discount from its original sales price but still twice the the price of the Nexus 7 and Kindle Fire.
Not to be left out Microsoft (NASDAQ: MSFT) recently threw their hat into the tablet ring with their Surface announcement. Though we have yet to have a release date, or a price, the pair of Windows based tablets will provide significant competition to not only the iPad but the Nexus 7. What little information we do have on availability of the Surface tablets is that one will be launching alongside Windows 8 and the second will be following it three months later. The pricing is supposed to be comparable to current ultra-books and tablets (though probably not comparable to the Nexus 7 as that hadn’t been announced at the time).
Gartner projects tablet sales of almost 119 million in 2012 and they further predict that 61% of those tablets sold will be iPads. With the Google Nexus announcement Amazon should be the most concerned, they have seen their sales dropping recently and the Nexus 7 is squarely aimed at their place in the tablet market. There have been rumors that Amazon will be refreshing their Fire line later this year and potentially adding a larger Kindle Fire which could help them compete. There have also been rumors that Apple will launch a smaller version of the iPad to better compete on price and form factor with the Nexus 7 and Kindle Fire.
Even though Samsung recently became the second largest maker of tablets after the iPad, their Galaxy Tab line of tablets has failed to catch on. It has faced numerous legal hurdles in various countries including being banned until changes are made in a few countries. Two of the highest profile bestselling Android based tablets here in the US have been the Kindle Fire and Nook. Both are running forked versions of Android without any Google services or apps. This has now changed and for the first time Android will have a strong, international tablet to compete with everything on the market.
ded004 has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Amazon.com, Google, and Microsoft. Motley Fool newsletter services recommend Amazon.com, Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.