Nexus 7 Faces Multiple Barriers to Sustainable Growth

By Don Reisinger  |  Posted 2012-07-24

Nexus 7's Chances for Tablet Dominance: 10 Reasons Why They Are Slim

Google's Nexus 7 is selling extremely well. According to the company's Google Play online store, the 16GB, $249 Nexus 7 is currently sold out. The cheaper $199 version is still on sale, but local retailers are saying that supply is not currently matching demand. It's a major issue. And it underscores the popularity of Google's tablet and resurgent growth of the 7-inch slate market in general.

Should Apple be concerned?

Despite the Nexus 7's success, the chances of it becoming dominant in the tablet market are slim. The device is certainly nice and consumers are obviously excited by it, but it has a number of shortcomings that can't be solved so soon. What's worse, there's a chance that Google might not even want to solve those problems. The company is simply too focused on advertising and Android to truly care about a single device's success.

Read on to find out why Google's Nexus 7 is unlikely to become dominant in the tablet market, and why over time, there's a good chance Google won't ever lead the tablet market.

1. The 7-inch display

The 7-inch display is obviously popular, given the Nexus 7's sales. However, no 7-inch tablet has come even close to matching Apple's iPad in terms of overall sales. The issue is that the display is too small for enterprise users and since it typically comes with less-powerful components, it doesn't appeal to many consumers. 

2. Long-term hype

The Nexus 7 has all the hype it can hope for at this point. But over time, the chances of it maintaining market momentum seem to be very low. Since it is competing in a market niche that appeals to only a subset of buyers, its growth potential is limited from the start.

3. The new iPad

If the iPad didn't exist, there would be a good chance of that Nexus 7 could build up a significant market. But, unfortunately, for Google, the iPad poses an insurmountable barrier to that goal. Even a popular Nexus 7 isn't enough to hurt Apple's tablet sales. 

4. The iPad Mini, too

According to several reports, Apple plans to launch a new iPad later this year, called the iPad Mini. The device would come in at a much lower price than the current slate and deliver a 7.85-inch screen. In other words, it'll be a direct competitor to the Nexus 7. And that's bad news for Google.

Nexus 7 Faces Multiple Barriers to Sustainable Growth

5. Stiff competition in the smaller tablet market

The issue for Google is that in the smaller tablet space, there's stiff competition. From Amazon to Barnes & Noble to even Vizio, a host of companies are delivering very similar devices at prices that match the Nexus 7. Simply put, it'll be hard€”especially over the next few months after hype dies down€”for the Nexus 7 to differentiate itself. 

6. Android

Android is a fine operating system that a lot people are using, but that doesn't necessarily mean that it'll be the top option in the tablet market. Today's consumers still care much more about iOS than any other platform. That is another issue the Nexus 7 can't overcome. 

7. Does Google want to be a hardware company?

Google is offering hardware now, but let's not forget that the Nexus 7 was built by Asus. And so far, there has been no indication that the search giant wants to be in the hardware market. Google is about software, search and advertising. Unless it focuses much of its cash and efforts on hardware, the Nexus 7 won't be dominant. True dominance takes time and dedication. 

8. The next Kindle Fire is coming

Google's chief competitor in the 7-inch tablet market is the Amazon Kindle Fire. So far, Google is beating that device because the Kindle Fire design is nearly a year old. But Amazon is reportedly planning on releasing a new version of the device in the coming weeks. Once that happens, all bets are off. 

9. The barriers to entry are low

As Google itself showed, the barriers to entry in the low-end tablet market are low. A company with a good design and some cash can enter the space with a respectable tablet and grab some market share. What makes anyone think that the Nexus 7 would be any different? 

10. A single device won't do it

Dominance in the tablet market, especially for an Android-based product, is not possible without offering multiple devices. Apple's iPad is such a juggernaut that not having a cheaper, smaller version, as well as a more expensive larger model available to customers would be a major mistake. Simply put, a single tablet just won't cut it in today's tablet market. 

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