Budget tablet market to boom this holiday season

Google plans to launch a version of its popular Nexus 7 tablet with a rock-bottom low price of $99, according to DigiTimes. But will the trade-offs Google needs to make to achieve that price be worth the discount? If Google follows through on the plan, the device would join a number of budget tablets that will sell for around $100 this holiday season, but many of the current $100 tables are not worth the savings.

Google is reportedly working with Asus on making both the $99 model and a second-generation, thinner Nexus 7 priced at $199. Asus, however, has already denied the reports.

The Nexus 7 is healthily selling at $199, so a $99 price point could be a game-changer. It also seems like a far stretch to make it to that price, even if Google takes some of the component cutbacks asumed necessary to reach that door-busting level. That said, such a price move could be strategic: A $99 Google tablet might be the only thing that could  keep the rumored iPad Mini from dominating the 7-inch tablet space. Many believe the iPad mini will cost between $250 and $300.

The low-cost tablet parade

It’ll be interesting to see how Google can manage to cut the price of the Nexus 7 in half, especially since the device costs $160 to build. The Nexus 7 already lacks a removable media card slot, HDMI-out, and rear camera.

Other inexpensive Android tablets have already paved the way. The Novo7 tablet, released first in China, features a 1GHz single-core MIPS processor, front and back cameras, and an HDMI port -- for under $100. But that tablet's pokey performance and unresponsive screen made it difficult to use, according to tablet reviewer Melisa J. Perenson.

The Smart Tab 1 tablet, priced at $125, runs Android 4.1 Jelly Bean and has expandable storage. It also uses an inexpensive single-core MIPS processor.

Analysts say a new generation of processors from MIPS called Aptiv rival those of ARM. I can’t help but think, though, that a single-core processor would be disappointing on the Google Nexus 7 for all but the most budget-conscious consumers. As positioned so far, Google's Nexus brand doesn't invoke images of a "budget" product.

The Eken B70

This week, a 7-inch tablet called the Eken B70 showed up at the FCC. The Eken B70 is retailing for about $99 in China, and it could hit U.S. shelves if it meets FCC approval. This cheap Android tablet comes with very low-end specs: A resolution of just 800 by 480 pixels, 4GB storage, and an ARM Cortex-A8 single-core processor. It runs Android 4.0 with full access the Google Play store, and it comes with a healthy array of ports including mini-USB, full USB, and HDMI-out.

With Black Friday just around the corner, tablet prices will surely drop for the holiday rush, just as they did last year. Seven-inch Android tablets from Polaroid and Sylvania dropped to $80 and $100, respectively, and a 10-inch Archos Arnova tablet was just $150.

Cutting costs, (maybe) not corners

To make a $99 Nexus 7, Google would definitely have to make some sacrifices. Like the other budget tablet makers, Google and Asus could perhaps turn to a dual- or even single-core processor instead of the current quad-core Tegra 3.

Two other ways a $99 Google Nexus 7 tablet might be possible: A cheaper screen or less memory. Jack Gold, an analyst a J. Gold Associates, told Computerworld that a tablet’s biggest costs are the screen, the memory, and the processor. Together, they could make up 60 percent to 70 percent of a tablet’s costs, with the processor costing between $25 and $50.

So Google and Asus could cut the tablet price by reducing storage to just 4GB instead of 8GB.

Or Google could drop the screen resolution for the $99 Nexus 7 down to just 1024 by 600 pixels (instead of the current Nexus 7’s resolution of 1280 by 800 pixels). That’s a typical display resolution for many 7-inch tablets, not just the ultra-low-priced ones. The Samsung's $250 Galaxy 2 7.0, Amazon's $159 Kindle Fire, and Barnes & Noble's $179 Nook Tablet, for example, all have displays of 1024 by 600 pixels. Furthermore, each of those tablets also has 8GB of storage.

Whether a $99 Nexus 7 comes to fruition or not, next-generation Nexus 7 tablets will have fierce competition this holiday season. There will be the fire sales on the lower-end Android tablets, as usual, as well as more capable 7-inch tablets. Barnes & Noble’s new Nook HD and HD+ tablets and the Amazon Kindle Fire HD boast higher screen resolutions than their original models. The 7-inch tablet market should be a lot more interesting in the next few months.

For comprehensive coverage of the Android ecosystem, visit Greenbot.com.

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