http://www.isuppli.com/Teardowns/News/Pages/Low-End-Google-Nexus-7-Carries-$157-BOM-Teardown-Reveals.aspx
The supply chain analysis firm ISupply says the parts to make the 8 GB Nexus 7 cost about $153. Add about $7 for assembly for a cost around $160. That leaves $40 for advertising, software development, management, shipping and other overhead expenses. Google is probably taking a small loss on each unit at the sales price of $199.95 delivered.
The 16 GB Nexus 7 costs about $10 more, but Google charges $250. So Google is probably making a small profit on the 16 GB model.
Amazon can expect to sell more copies of the next generation Kindle Fire that Google will sell of the Nexus 7. So Amazon should be able to enjoy slightly lower prices from equipment manufacturers than Google negotiated. That means the next generation of the Kindle Fire will probably have a quad core processor and 1280x800 high quality LCD touchscreen, and still cost $199.
Amazon could continue to sell the original Kindle Fire at a lower price point, like Apple does when a new iPhone or iPad model is introduced. Amazon might also offer a version of the original Kindle Fire that subsidizes a low purchase price by displaying ads.
The Kindle Fire is the best-selling Android tablet, but its numbers pale in comparison with iPad sales. So Apple is in position to really squeeze the component manufacturers for good prices. Due to Apple's cachet and the strength of the iPad app marketplace, a 7 inch iPad could command a premium price. A 7 inch iPad priced at $295 could still capture a large percentage of sales in the 7 inch market.
CEO Steve Ballmer recently said that Microsoft will compete with Apple in every possible arena. So it's possible that we could see a Surface tablet running Windows RT in the sub-$300 price range this October.
This Fall is looking to be very interesting for fans of the 7 inch tablet!
