Kai design may help Google keep Nexus 7 tablet costs low

Computerworld - Google may be using Nvidia's new Kai reference design in its highly anticipated Nexus 7 tablet, a move that would bolster the tablet's reported low starting price of $199 without much of a Google subsidy. The Kai design is intended to keep down the costs of materials.

The 7-in. tablet is reported to include a high-end quad-core Nvidia Tegra 3 processor, but cutting back on other features is expected to reduce the tablet's price. For example, the device will have only one camera, no Bluetooth or 3G radio chip, and no SD or HDMI ports -- features that are standard on some higher-priced tablets. The Nexus 7 will also come in only two versions, one with 8GB of storage and the other with 16GB, much less than some high-end tablets.

Nvidia first announced the Kai reference design at the Consumer Electronics Show in January. It was Nvidia's attempt to show how a 7-in. Android tablet could offer reasonable performance at a low price of about $200.

An Nvidia executive said earlier this month at the Computex trade show that Kai-design tablets would be announced in the second half of the year. However, Google may be readying its own Kai design early, by announcing the Nexus 7 at Google I/O, which starts Wednesday, Computerworld commenters theorized.

Asustek is the reported maker of the Nexus 7.

The Kai reference design relies on the Tegra 3 chip in various ways, Nvidia has said. For example, Kai uses DirectTouch technology to offload processing work needed for the touch interface onto the Tegra CPU, instead of using a separate touch controller.

Kai also uses Nvidia's PRISM (Pixel Rendering Intensity and Saturation Management) technology to adjust pixel colors on a display to reduce the level of brightness required, allowing manufacturers to use cheaper displays, Nvidia has said. Displays are the most expensive part of a tablet, and the Nexus 7 will reportedly have a display with 1280 x 800 resolution.

Kai also uses cheaper DDR3L memory, according to Nvidia officials who spoke at an investors meeting in May.

While some analysts Monday speculated the quad-core Tegra 3 processor would raise Google's costs and require hundreds of dollars in subsidies per machine, the Kai design could change the equation.

"It's entirely possible" the Nexus 7 could have materials costs of about $200, lessening the need for a big Google subsidy, said Tom Mainelli, an analyst at IDC. "Or maybe Google's selling it at close to cost at first, they get below $200 as the Nexus 7 gets traction and they ramp up production."

Jack Gold, an analyst at J.Gold Associates, said it's possible for Google to keep its costs low, as other Android tablet makers have done. The 7-in. Acer Iconia Tab A110, shown at Computex earlier this month, is expected to sell for less than $200, and will also include a quad-core Tegra 3 processor.

The Kindle Fire, Amazon's 7-in. tablet, has been the most popular 7-in. tablet model, and sells for $199. A next-generation Fire is expected in July. Amazon changed the Android interface in the Fire and refers all its users to Amazon services, not Google services.

Since there are other comparable machines on the market, the question for Google with the Nexus 7 is how it will distinguish itself, analysts said. Most agreed it will have to be through tablet applications built by third-party developers and Google services. Including the next version of Android, known as Jelly Bean, expected to be Android 4.1, will also add some distinction.

Gold cast some doubt that Google would do well by building a "cheap, 7-inch tablet with limited display resolution and lower-end chips and less memory ... Google can't do it any cheaper than Asus, Acer, Lenovo or others and still have a markup that makes money."

If Google "goes the low-end route like Kindle did, then Google will be showing a device that won't compete well with [Microsoft] Surface tablets, or the Asus Transformer," he said. "In my opinion, Google needs to go the high road and show a killer tablet in order to stimulate the market. A low-end device just won't build the excitement they need."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

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