The Nexus 7 I ordered for my wife last week arrived two days ago. That’s been enough time for Cathy and me to look it over closely and get a good feel for its capabilities. It’s a very interesting device not just for what it does but what it doesn’t do. There’s a strategy here, and as usual I think Google is playing a longer game than people looking at this product in isolation understand.
The Nexus 7 seems to me to be very obviously designed to be an inexpensive web terminal for use with home and small-business WiFi networks. Look at what’s missing: cellular modem, rear-facing camera, SD card. These are exactly the things you’d want in a road-warrior device intended to compete both at the high end of the cellphone market and against notebook/netbook PCs at their low end.
That having been said, the Nexus 7 does the limited job it’s designed for extremely well. It’s easy to configure, easy to use, and the audiovisual presentation is slick without being gratuitously flashy. We found the voice-search capability particularly effective and well integrated. We were able to watch a movie at our kitchen table (The Black Shield of Falworth, a classic piece of 1950s swashbuckler cheese) without lag, artifacts, or dropouts.
The device is selling like crazy and has spectacular buzz. After I had already privately decided to get Cathy one, Linus Torvalds gave it a public thumbs-up and I got completely unsolicited “buy one now!” raves from two friends of mine not previously noted for anything but jaded cynicism about the consumer-electronics gadget of the week. It is clear that Google and Asus have a mega-hit on their hands – analysts are already describing it as the Kindle-killer and I think there’s no hype at all in that assessment.
The really interesting question about the Nexus 7 is why it’s not a more ambitious device. It’s clear from looking at the components that Asus could have built a full-featured tablet that could compete head-to-head with the iPad 3, had Google wanted that; the obvious inference is that Google didn’t want it. Which is interesting and revealing.
What the Nexus 7 looks like to me is that it was designed to meet a specified price point rather than a specified feature set. It’s what you’d come up with if you told the engineering team “It’s gotta retail under $250 with tax and shipping – start with your dream tablet, cut out features that won’t fit that budget, and give me the best device that fits a plausible use case. Then we’ll design the marketing around that.”
What kind of product and market strategy does this fit? I don’t think that’s complicated. This is also exactly what you’d do if your goal were to disrupt the iPad’s market from the low end. You’d identify a large class of potential iPad customers and target their use case (home and small-business web terminal) with a device that’s a substantially better value for the dollar. The goal would be to play for the highest-volume segment of the market in order to put downward pressure on the iPad’s growth rate without challenging it directly, the latter being something Asus/Google may not be able to do yet.
Thus: IPS display nearly as good as the iPad’s (216ppi to 264pp). A replaceable battery, and a case with clip closures rather than glue. Google wants any random PC shop to be able to service this thing; it’s part of the value proposition. That aspect of the design also says to me that it’s aimed at low-cost fleet deployments. Certainly if I were a Fortune 500 IT manager I’d look hard at it as a way to lower my whole-lifecycle costs.
My prediction is testable. If it’s correct, the Nexus 7 won’t be a one-off. Within four months or so we’ll see a followon that ramps up the pressure – probably a 9-inch screen, possibly SD card support, and (crucially) price point no higher. I don’t think, along this line of attack, we’ll see a cellular modem being added any time soon; it’s in Google’s interest to avoid conflict with its smartphone partners, who have been doing a good job of pushing Android – that is, as opposed to its tablet partners who’ve been doing a relatively crappy one.
Remember Google’s long game. For Google’s advertising and content businesses to flourish, Google needs web access (and especially mobile web access) to be thoroughly commoditized, with nobody else in a position to collect rent on the path to your eyeballs. This is why they don’t need to make a dime of licensing income on Android – it’s a strategic play to prevent rent-seeking.
The design and positioning of the Nexus 7 is perfectly consistent with this goal. It’s a patient, well-thought-out play that will amortize fixed costs for other firms in Google’s partner network (Asus, Tegra, whoever’s ODMing the display) so that follow-on devices can issue at the same or a lower price point.
That result will be good for everybody. I don’t think I really need to tell the open-source community to get behind this product and push it, because the buzz says that’s already happening. It’s not the iPad-killer, but the road forward to something that will be is not difficult to discern.
UPDATE: Cathy’s thoughts on the device
UPDATE2: Contrary to myth, Tony Curtis does not at any point in The Black Shield of Falworth say “Yonder lies the castle of my fadda da king.” His New York accent is, however, hilariously obtrusive throughout the movie.