Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

What Will Amazon.com, Inc. (AMZN) Do After Google Inc (GOOG)’s Big Unveil?

Next Wednesday, Google Inc (NASDAQ:GOOG) is hosting a get-together with the tech press, led by Android and Chrome head Sundar Pichai. That’s less than a week away, and there’s very little doubt as to what the search giant likely has in store.

Google Inc (NASDAQ:GOOG)

The timing is just too perfect for it to be anything else. Chances are quite high that Google Inc (NASDAQ:GOOG) will unveil the newest version of Android, 4.3, while launching a second-generation Nexus 7 tablet. There’s plenty of other evidence to corroborate this theory.

First off, an early build of Android 4.3 has leaked after a Google employee sold a Nexus 4 on Craigslist that was running the newest version. That’s almost worse than losing a prototype in a bar, since this transaction was entirely voluntary. Android 4.3 is clearly just about ready for prime time; Google Inc (NASDAQ:GOOG) just has to officially take the wraps off.

It’s now been almost exactly a year since the first Nexus 7 launched. Rivals have been cutting prices, yet Google Inc (NASDAQ:GOOG) has stood pat with its $199 tablet in the Google Play store. That hasn’t stopped third-party retailers from discounting the aging tablet, though, to clear out inventory.

Speaking of third-party retailers, some leaked internal documents from OfficeMax Inc (NYSE:OMX) point to a retail launch next week for the second-generation Nexus 7. At a time when rivals are cutting prices, Google seems to be going the other way, with the new model expected to price at $229 for an entry-level 16-GB model, and $269 for a 32-GB model.

This possible price increase has notable competitive implications. A tablet’s most-expensive component is always the display and touchscreen assembly, usually around 40% of the total bill of materials, or BOM. Google and its primary 7-inch rival Amazon.com, Inc. (NASDAQ:AMZN) are both expected to move to similarly high resolutions this year with their flagship tablets.

Any increase in Google’s cost structure (via ASUS) related to the display will also likely play out at Amazon.com, Inc. (NASDAQ:AMZN). In fact, early estimates of the Kindle Fire HD BOM were actually slightly higher than the Nexus 7. If Google Inc (NASDAQ:GOOG) has to raise prices due to pricier components, Amazon.com, Inc. (NASDAQ:AMZN) will face the decision of whether or not it does likewise. The e-tailer’s favorite strategy is to undercut rivals to become a loss leader, and it could have an edge with its own upgraded models later this year if it absorbs any increase and sticks with $199.

Right now, the ball is in Google Inc (NASDAQ:GOOG)’s court. After next week, Big G will pass it back to Amazon.com, Inc. (NASDAQ:AMZN).

The article What Will Amazon Do After Google’s Big Unveil? originally appeared on Fool.com is written by Evan Niu, CFA.

Fool contributor Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Google. The Motley Fool owns shares of Amazon.com and Google.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Loading Comments...