Google's Nexus tablet selling fast across retail chains
(Reuters) - Google Inc's “Nexus 7” tablet is off to an encouraging start, with major retailers running out of the gadgets as the Internet company's first entry in an increasingly crowded market showed up in U.S. stores on Friday.
Context & Ripple Effects
The Nexus 7's arrival closes a loop that started with a March rumor pegging the Nexus tablet at as low as $149 and ran through Staples taking pre-orders last week. The rollout was bumpy by design: a day before the store debut, Google asked retailers to halt sales so the official Friday launch would land cleanly.
What makes this more than a gadget story is that it is Google's first hardware entry into a market already owned by Apple and Amazon's Kindle Fire — and PC Magazine had spent March arguing that this retail push would not be a repeat of the Nexus One phone's online-only misfire. Stockouts at major chains on day one suggest the low-price, Play-store-anchored bet is landing with buyers.
First-order effects
- Major retailers including Staples are selling through initial Nexus 7 inventory immediately, forcing restock cycles within days of the Friday launch.
- Google gets its first proof of retail-channel demand for first-party hardware, validating the decision to sell through chains rather than repeat the Nexus One's web-only approach.
Second-order effects
- Amazon and Apple now face a sub-$250 Android tablet with Google Play's 600,000-app catalog behind it, pressuring Amazon to defend the Kindle Fire's price-content bundle and Apple to hold its iPad line above the budget tier.
- Retailers that stocked the Nexus 7 gain traffic at a moment when tablet shelves were otherwise split between two ecosystems, giving chains leverage to demand favorable allocation on future Nexus devices.
Third-order effects
- If the pattern holds, Android tablets consolidate around a loss-leader model — hardware priced near cost to drive Play media and app revenue — structurally separating Google's tablet strategy from Apple's margin-led one.
- A successful first-party Nexus line also risks straining Google's relationships with Samsung, Asus and other Android OEM partners, who would be competing against their own platform owner on price.
The trend: Tablet competition is shifting from spec sheets to ecosystem-subsidized pricing, with Google using cheap first-party hardware to pull buyers into Google Play.