Cheap Google Tablet Almost Certain to Be a Hit

Yesterday the Wall Street Journal published what amounts to a round-up of recent Google tablet rumors. None of the information was really new.

Previously Eric Schmidt confirmed that Google would be putting out a "highest quality" tablet at some point later this year. A Google-branded tablet (expected to be 7-inches) is intended to compete directly with the Kindle Fire. It's also a direct response to the failure of other Android tablets to date.

Here's are the quasi-factual nuggets extracted from the WSJ piece: 

  • Co-branded Google tablets (think Nexus smartphones) will be made by Asus and Samsung
  • Google's Motorola unit will make Google-branded tablets
  • Pricing of a Google tablet would match or beat the Kindle Fire ($199); Google will subsidize the device accordingly

Earlier rumors suggested that the price might be $149. Either at $149 or $199 a decent 7-inch Google tablet is likely to be highly successful.

The Kindle Fire is actually quite a mediocre tablet compared to the iPad. It's well integrated with Amazon content but that's about it. Email and web surfing are quite painful on the device. Google almost certainly would make a more functional tablet for general purposes. It would also have the benefit of Google's voice actions. 

Google also has nearly the content ecosystem that Amazon does (i.e., Google Play). It can also afford to subsidize the device because it will make money on search and mobile display advertising. 

A $149 Google tablet would undermine Kindle Fire, compelling Amazon to lower its prices. Pricing here is a key variable. Regardless of whether it comes in at $199 or less, a cheap 7-inch Google tablet will be successful. The outlook for a larger tablet and direct iPad competitior would be more murky. 

However I would predict that Google will sell millions of these smaller, highly subsidized devices.