Photo: Google Play
Google put on a great show in San Francisco yesterday, with a bunch of skydivers leaping out of a plane and landing on the roof of the conference centre to demo Google’s new computerized glasses.And Google released an impressive new tablet, the Nexus 7, that is designed to compete with the iPad and Amazon’s Kindle Fire.
And Google unveiled a cool-looking ball thing, the Nexus Q, that is basically a round Apple TV.
So, that’s all good. It’s exciting that Google’s now becoming a hardware company (exciting for consumers–investors should be terrified). It’s time Apple had some more deep-pocketed competition.
But we have a question for Google:
What’s up with the Nexus pricing strategy?
The Nexus 7, the tablet, is priced at $199. That’s the same price as Amazon’s Kindle Fire, and it’s way below the price of the low-end iPad ($399). Google won’t make any money at that price–in fact, it will probably lose money–but making money isn’t Google’s point. Creating an Android tablet that people actually want to buy is Google’s point. And, presumably, selling some content is Google’s point (That’s how Amazon makes money on the Kindle Fire).
So, we understand the Nexus 7’s $199 price point. If it cost any more than that, it wouldn’t stand a chance.
(It’s going to have problems anyway, frankly, because Google doesn’t have much built-in distribution. It doesn’t have physical stores, like Apple, and it doesn’t have a vast virtual store, like Amazon. Welcome to the world of physical goods, Google! When’s the first store opening?)
But the Nexus Q, Google’s round Apple TV, is priced at $299.
And that price we don’t understand.
As best we can tell, the Nexus Q really is just a round Apple TV.
It’s cool looking. And it’s made in America, which is refreshing.
But it costs 3-times as much as the Apple TV. And you have to own an Android tablet or smartphone to use it (the “remote control” is the Android gadget).
So, why would anyone buy it?
And given that Google doesn’t appear to care whether it makes money on hardware sales (e.g., Nexus 7), why is Google pricing the Nexus Q at 3-times the competition? Does it not want to sell any?
Google’s TV offerings have always been bizarre. The first “Google TV” was a product that only a computer engineer who didn’t watch TV could love. This second or third Google TV product seems much more fashionable and useful, but its price is bizarre.
So, what’s up with the pricing strategy?