By Adam Doud | July 31, 2013 7:00 AM
When rumors started to surface about the new Nexus 7 – as opposed to the old Nexus 7 I suppose (what are they going to call it next year?) – I was disappointed. Google was delivering on so much including a fast processor, plenty of RAM, LTE, and a whole bunch of jiggly goodness. But one part of the rumor’s felt sour to me – $229. Two hundred and twenty nine dollars. It just felt….off.
Last year, Google introduced their first generation Nexus 7 at the sub-200 dollar price point. This is not a small thing. Please don’t misunderstand. I’m not quibbling over whether the new Nexus 7 is worth the price. I’m pretty sure it is. It’s a very solid and beautiful tablet that is well thought out in many ways. Trust me, I don’t mind adding a half of a tank of gas to the price of the new Nexus 7.
Consumer-minded pricing is a fascinating subject, if one is fascinated by such things. One of my favorite classes in college was called “The Art of Persuasion”. The class was not about what I thought it would be about. It was about marketing and advertising. As such, I learned a few things.
Consumer-minded pricing is why we have items on sale for $1.99 instead of two dollars. It’s why cars sell for $13,999 as opposed to $14,000. Studies have shown that a product that sells for “Not two hundred fifty dollars, not two hundred dollars, but $199!” does really well. It’s mostly because at a sub-whatever price point, the consumer thinks they’re getting more of a deal. It’s one of those silly, stupid little things that for some odd reason actually work.
Amazon vs. Google. FIGHT!
But in the mobile industry what Google did last year was even more impressive. Heck, it was down right amazing. They introduced a high-quality tablet at a sub-200 dollar price point. They really set the standard on what tablet pricing should be in order to be competive. At the $199 price point, you had a choice between an Amazon Kindle Fire HD or a Nexus 7. I dare say in the mobile tech world, that is not a choice at all. The Nexus 7 with its stock Android experience, Google Now, plus the ability to do almost anything you can on a Kindle Fire makes it a no-brainer.
Of course, the average consumer is not a typical mobile-tech affectionado. The Kindle Fire is a product that is always in your face every time you visit Amazon’s website. For many consumers, that’s a lot of in your face time. Google play, maybe not so much. So, it makes it that much more important to price the new Nexus 7 competitively with the Kindle Fire. Which takes us back to the $199 vs $229 price point.
I’m going to reiterate here – it’s not that an extra thirty dollars is a big deal. Most Americans take more than that out of the bank on an average ATM visit. But, the price difference to the average consumer who is being beaten over the head by Kindle Fire this and Kindle Fire that can be pretty significant. Add to that the fact that the Kindle Fire can access Amazon Instant Video which comes free with an Amazon Prime membership – the Nexus 7 can’t do that. For me, this is a big deal and it gives me pause. We could discuss the genius or lack of genius that prevents Amazon from releasing an Instant Video Android app, but we’ll save that for another time.
Coulda, woulda, shoulda
Getting back to the $229 price, let’s play the coulda, shoulda, woulda game. It made me wonder once the product was unveiled if there were any areas where it’d be possible to trim the fat a bit and bring that price down to the $199 sweet spot. Having seen the introductory presentation and heard a bit from Taylor Martin’s experience, I found a couple of areas where this could have done a little snippy snippy and perhaps brushed knuckles on the $199 floor like a bungee jumper with bad depth perception.
First of all, the rear-facing camera. I’ve gone on long enough about what a mistake this was, but it remains a feature that just didn’t have to be there. Camera tech is not very cheap, nor is it particularly thin, so adding bulk plus a device that should –NOT– be there seems like such a waste, especially considering it probably added a few dollars to the manufacturing process and therefore coaxed a bit more out of your Google wallet.
Surrounded by bad
The second expendable area on the new Nexus 7 was the faux surround sound that they touted at the unveiling. The feature comes to us courtesy of Fraunhofer, the same company who developed the mp3. This technology is primarily software based, and we can’t be sure of the exact nature of the relationship between Fraunhofer and Google, so there’s not really much of an obvious cost-reduction here. Coupled with the fact that Virtual Surround sound will be packaged with Android 4.3, and virtual surround sound likely has little to do with the actual cost of the tablet itself, except for perhaps licensing/software development costs.
That being said, Taylor Martin told us on the podcast last week the speakers sound pretty bad, so why bother?
The Magic is gone
I’m not going to lament the missing of the $199 price point beyond this editorial. An extra thirty dollars on the face of it should do little to deter the average techie from making what to most of our readers would be the obvious choice. But there is something to be said for those magical prices that just attract sales. Perhaps one day, when we’re buying $14,000 cars, we won’t care, but for now, it’s the one point that Google missed on, even if they nailed everything else.