Nexus 7 Sold Out: Google Halts 16GB Shipments, Surprised By Demand


It's a problem most companies wish they had.

But search giant Google, which has released successful product after product (with a notable exception or two), isn't most companies. Its latest winner seems to be the Nexus 7. While official figures have yet to be announced, sales for the 16 gigabyte version of the tablet have apparently been so strong that orders on them have been halted in the Google Play store in the U.S. and U.K., according to The Guardian.

"Sources close to Google say the search giant seriously underestimated the demand for the 16GB version of its 7in Nexus 7 tablet, which has sold out from stockists and other sources while demand for the smaller 8GB version remains comparatively low," the paper's Charles Authur writes.

There's also word that "some retailers [besides Google Play] are reporting sellouts," according to CIO Today.

And why not? The Huffington Post's in-house gadget guru, Jason Gilbert, thought the Nexus 7 -- with its killer screen resolution, camera and integration with other Google products -- put Amazon's Kindle Fire to shame. (Both are priced at $199.)

Possible reasons why 8GB version isn't selling out while its 16 gig cousin is? Availability: The 8GB version has sold only online, while the 16GB version can be found in brick-and-mortars. Price: At $199 vs. $249, the 16GB Nexus tablet isn't that significantly more expensive. Memory: The Nexus 7 doesn't come with an option for expandable storage beyond what comes with the device, so anyone worried about file space is probably opting for the roomier 16GB device over the 8GB.

There are some, however, who believe Google's ripping off customers by offering a 16GB model. "The 8GB of storage that come with the Nexus 7’s entry-level tablet doesn’t sound like a lot, but I suspect it’s enough for most people," Slate's Farhad Manjoo argues. "You’ll almost always use these devices when they’re connected to a broadband line—when you’re at home, work, or a coffee shop—or when you’re in between those locations. This means you’ll always be pretty close to virtually unlimited online storage—the splendors of Dropbox, Netflix, Spotify, iCloud, Flickr, Facebook, et al—so you won’t need to keep all of your media on your tablet."

As Manjoo pointed out, the 8GB Nexus 7 costs Google $159 to make while the 16GB costs $167, according to iSuppi, a firm that breaks down the costs of gadgets' parts. With consumers paying $199 and $249 respectively, the profit margin for the former is 20 percent while the margin for the latter is 33 percent. (Just to put some perspective on the markup memory-hungry Nexus buyers are facing.)

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