The Macalope Daily: Welcome to Low-Marginville, population: you

Looks like Eric Schmidt squeaked out a technical win on his prediction that Google would launch a “tablet of the highest quality” within six months. So, congratulations, Eric!

We’ll have to wait for the reviews to see if the Nexus 7 tablet really is “of the highest quality.” It’s hard to see how that can be completely true, given the 7-inch size, entry-level 8GB capacity, and $199 price point. Clearly the Nexus 7 is designed to target Amazon’s Kindle Fire, not the iPad.

And that’s not much of a speculative limb the Macalope’s going out on there, because a representative of Asus, makers of the Nexus tablet, told Reuters “It’s targeting Amazon.” (Tip o’ the antlers to The Verge.)

The Macalope’s certain that some people won’t get it and we’ll be festooned with slideshows of the top ten reasons to buy a Google Nexus 7 tablet instead of an iPad. But who would have thought we’d be over two years into the iPad’s life and it would still not have a direct competitor worth a darn? Think of all the bets we could have won!

So now Amazon and Google get set to slug it out for the low- or no-margin segment of the market and hope that, like First CityWide Change Bank, they can make it up on volume. Oh, not sales volume, but—for Amazon—the volume of stuff you’ll buy from it to put on the device, and—for Google—the volume of ads you’ll see and the data about you that it’ll collect.

Apple may charge you twice as much for a bigger and better tablet, but it also expects less of you after you buy the darn thing. Amazon and Google are so needy.

Our pals at DigiTimes say Amazon will drop the price of the current Kindle Fire by $50 (tip o’ the antlers to Adrian Kingsley-Hughes) in preparation for the introduction of a new Fire, so you can totally possibly maybe conceivably take that to the bank or more likely not at all. It’s not unlikely, but let’s just say that since DigiTimes said it’s going to happen that we have absolutely no proof that it is going to happen.

The Kindle Fire sold well out of the gate, but then dropped off in the following quarter. The Macalope was excited when the Fire was announced, but ultimately let down by the reviews (he wouldn’t be surprised if the same thing happens with the Microsoft Surface). John Gruber has remarked on the seemingly low resale value of the Kindle Fire, so it seems like that sentiment is shared. To know it is not necessarily to love it.

Well, maybe the Nexus 7 will fare better in the “highest quality” category. But it seems to this pointy prognosticator that when you’re building something designed to make money in some other way than making customers happy, that’s the kind of result you’re going to get.

[Editors’ Note: In addition to being a mythical beast, the Macalope is not an employee of Macworld. As a result, the Macalope is always free to criticize any media organization. Even ours.]

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