Google’s New Tablet is a Threat to Other Android Manufacturers but Not Apple

Google Inc’s new tablet, Nexus 7, is equipped with the latest quad-core  processor and is the first Android device to run on the latest Android 4.1 (Jellybean). While the technical specifications put the product on par with the most top tier Android tablets, the US$199 price point makes it stand out from the fray.

Apple Inc’s iPad is less affected as the company commands a strong following of fans and its ecosystem of apps and services are key differentiators. Sales of Android tablets by other manufacturers for the next few months will slow as consumers put off purchases in anticipation of the release of the Nexus 7 in their market. Manufacturers are only left with two options:

• Match Nexus 7 in price and suffer financial losses
• Stop selling and suffer losses due to high inventory

Nexus 7 is not expected be particularly profitable for Google and the new venture does cause a rift between Google and its hardware partners. Essentially, the Nexus 7 will only benefit the lucky consumers in selected markets and nobody else.