The $200 price point seems to be the sweet spot as far as tablets are concerned. When Amazon launched its Kindle Fire slate, it caught the world by storm at that price and now Google is launching its highly commended Nexus 7 tablet at the same price. According to supply chain data, Google is expected to sell 6 to 8 million tablets this year on that price as Google is hoping to make a more meaningful dent into the market-leading iPad’s market share, which recent estimates place at 70 percent of the worldwide tablet market.
Tech Thoughts is making the prediction on Google’s 6 to 8 million sales figure of the tablet this year based on information from DigiTimes. The publication, which has a mixed track record in the past, is reporting that Google had ordered 4 million touch panels in the third quarter alone for the Nexus 7. Tech Thoughts is predicting production volume as such:
From the Digitimes report above, TPK Holding & Wintek are the suppliers for the Nexus 7’s OGS panels. The two companies shipped one million units in June and 1.4 million units in July. Including the 1.4 million units in July, they have received orders for 4 million panels in Q3 2012. These figures should be equal to the number of Nexus 7 units going into production in each of those months/quarters. We also know that the initial shipment volume delivered to Google was 600,000 units in June. We also know that Google had initially estimated sales of 3 million units by the end of the year. This means that after looking at initial demand, Google & Asus may have roughly doubled their estimates and cranked up the production volume.Using these figures with Little’s Law gives us a cycle time of 2.5 weeks, i.e. it takes 2.5 weeks to produce and deliver a Nexus 7 unit to Google. Since monthly production volume stays at roughly 1-1.5 million units, production capacity is unlikely to be a constraint. Therefore, we can assume a constant cycle time and calculate the total Nexus 7 orders delivered to Google at the end of each month.
It is estimated by Phone Arena that Google will sell 3 million units in the third quarter and another 3 to 5 million in the fourth quarter of this year, giving the company a total estimate of 6 to 8 million tablets.
It’s unclear how Apple’s rumored iPad Mini will impact the estimates for Google’s sales numbers when that tablet comes to market.
The figure may not be unreasonable as the Nexus 7 has been in hot demand through Google’s Play Store as well as through third-party resellers. The tablet combines a high resolution 720p HD display alongside powerful specs like a quad-core NVIDIA Tegra 3 processor architecture based on the Kai platform for high performance.