Google estimated to earn $15 for every Nexus 7 tablet sold

It’s generally a rule of thumb for a company to produce a product that could be profitable but if you are already one of the wealthiest and most respected in the industry, that metric isn’t always required. Case in point is Google’s upcoming Nexus 7 tablet, a device that the search giant is putting out primarily to compete with Amazon’s Kindle Fire and the Barnes & Noble Nook Tablet. The $199 price tag will certainly make it competitive but is Google going to make enough profit from each sale to be worth their while?

Research firm UBM TechInsights believes it is costing Google $184 to manufacture each Nexus 7, leaving a sparse $15 profit margin at the end of the day. In contrast, it is believed that Amazon makes $46 per Kindle Fire sold while Apple generates a profit of around $170 per iPad, so why would Google even bother with such a low margin product?

There are a couple of compelling reasons, actually. First, if consumers shopping in this price range are buying the Nexus 7, that means money isn’t being sent directly to their competitors for their tablets. It could be as simple as that, but CNET also points out that Google is probably hoping to generate additional revenue streams based on tablet use. The majority of this revenue is likely to come from advertising, the publication says.

Google is expected to launch the Nexus 7 tablet within a couple of weeks. Be sure to check out our hands-on review later this evening for a full evaluation.

PC makers losing interest in tablets, focusing on Ultrabooks

After struggling to play catch-up for more than a year, PC vendors are reportedly losing interest in competing against Apple (and now Amazon) in the tablet business. As you well know, Apple has maintained an iron grip on the market for nearly two years with its iPad, while Amazon's first tablet has been highly successful, becoming the e-tailler's best-selling product this holiday season. Although the company hasn't released any sales figures, it claims to have sold millions of Kindle Fires before the Black Friday craze began.

Given the rise of tablets, netbook profits have been whittled to the bone and most vendors have already abandoned the mini-notebook segment with Acer and Asus clashing over the remaining turf. Meanwhile, traditional laptop sales are currently being strained by worldwide economic turmoil and supply shortages stemming from recent flooding in Thailand. As gloomy as things might appear, DigiTimes' sources believe the notebook industry is in for a rapid upturn in the coming year, especially with the rollout of Ultrabooks.

PC makers are reportedly enthusiastic about Intel's thin-and-light initiative, not least because Ultrabooks offer greater profitability than standard mobile machines. The MacBook Air competitors kicked off to a mediocre start this year as Acer and Asus quickly halved their sales forecasts. At least part of the problem is blamed on the systems' unexpectedly high retail prices. Some early models breached Intel's intended sub-$1,000 target, costing more than the Air. Despite witnessing a lukewarm response, insiders remain optimistic.

PC makers are implementing various cost-cutting measures to ensure the next wave or two of Ultrabooks meet Intel's pricing guidelines. The chipmaker itself is supposedly offering partners a marketing subsidy to cut MSRP prices by 5-10% in conjunction with heavily discounted CPUs. DigiTimes also reported last month that Ultrabook manufacturers are looking to cut corners by using more plastic internals. Along with lower prices, Ultrabook sales will undoubtedly benefit from the upcoming hype of Ivy Bridge and Windows 8.

Kindle Fire update to address performance and privacy issues

Amazon's Kindle Fire tablet launched to much fanfare this past November, poised to steal some thunder from  Apple's popular iPad 2 with a tempting $199 price tag. The device went on to become a best-seller among Black Friday and Cyber Monday shoppers at Amazon.com as well as Best Buy and Target stores.

As the excitement over the Kindle Fire begins to wane, Amazon is now moving to address some of the criticism surrounding its tablet with an upcoming software update. Specifically, the company said the update should improve overall performance and multitouch navigation, while also adding a feature that will allow users to delete their browsing history -- something that will by welcomed by those concerned about privacy.

The update will be made available to users over the air in less than two weeks, according to Amazon spokesperson Drew Herdener. It's unclear if other common complaints, such as occasional lockups that require a hard reset as well as insufficient volume for movies and Wi-Fi issues will be addressed as well.

Not all issues can bee fixed by software, though. The Kindle Fire has been criticized for its lack of physical volume buttons and an awkwardly placed power button that makes easy to turn the device off inadvertently.

Amazon sees the Kindle line of devices as critical for its future strategy and thinks about them in terms of its lifetime value. This is why the company is willing to lose money on the sale of each device, making up for the loss with market share, and the sale of accessories, content, advertising and special offers.