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Will Google's $229 Nexus 7 Upgrade Dethrone Apple's iPad Mini? (AAPL, GOOG)

Will Google's $229 Nexus 7 Upgrade Dethrone Apple's iPad Mini? AAPL, GOOG
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Last month, rumors claimed that Google (NASDAQ: GOOG) would raise the price of the Nexus 7 to make the second-generation model stand out.

Instead of retailing for $199 (the price that the original model launched at last summer), the report said that Google would charge $30 more for the base model. It was unclear how much the company would charge for a Nexus 7 that contained a larger hard drive.

Wednesday, Google unveiled the second-generation Nexus 7 as expected and confirmed that the price has increased to $229 (for the 16GB model) and $269 (for the 32GB iteration).

Related: Google Could Spend $500 Million Promoting American-Made Moto X

The new model is 2mm thinner, 50g lighter and contains dual speakers to improve the audio experience. The screen resolution has been increased from 1280 x 800 pixels to 1920 x 1200 pixels. Google proudly touted this upgrade, as it means that the Nexus 7's display now features the highest resolution of any seven-inch tablet. The Nexus 7 could retain that title even after the iPad Mini 2 is released if Apple (NASDAQ: AAPL) chooses to skip out on the Retina Display upgrade.

The price increase is not the only rumor that came true. NVIDIA (NASDAQ: NVDA) bas been replaced by Qualcomm (NASDAQ: QCOM), which provided a 1.5GHz Snapdragon S4 Pro 8064 processor for the new Nexus 7, along with Adreno 320 graphics and 2GB of RAM.

While Google's tablet is notably more expensive than the low-cost (and currently discounted) devices from Barnes & Noble (NYSE: BKS) and Hewlett-Packard (NYSE: HPQ), it is practically in line with the Kindle Fire HD.

Unlike other tablet manufacturers, Amazon (NASDAQ: AMZN) charges consumers an extra $15 to get a Kindle Fire without "special offers" (the ads that appear while the device is idle). Thus, the Kindle Fire HD retails for as much as $214 -- just $15 less than the new Nexus 7.

Google also benefits from the fact that Apple is not expected to announce a price cut when the second-generation iPad Mini is released, but that could soon change. iPad sales plummeted during Apple's fiscal 2013 third quarter, moving just 14.6 million units. This does not compare well to the year-ago period, when Apple sold 17 million iPads. During this period, Apple had to rely on sales of the iPad 3 and iPad 2 because the iPad Mini had not yet been released.

iPad sales soared last fall after the iPad Mini arrived. Those high sales continued through the March quarter when Apple sold 19.5 million units.

If sales don't increase soon, Apple might be forced to bring the iPad Mini in-line with its cheaper competitors.

Even if it doesn't, Apple is likely to maintain its lead in the tablet space. Google is not expected to sell more than eight million units of the next-generation Nexus 7. While that sales achievement would be huge for Google, it's small potatoes compared to Apple -- even as iPad sales decline.

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ

Posted-In: Apple Google iPad iPad Mini Nexus 7News Success Stories Tech Best of Benzinga


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