Google's Nexus 7 tablet is expected to bring in a small profit to the company.
The 8GB model costs between $151.75 and $159.25 for all the materials including manufacturing, while the more expensive 16GB model costs between $159.25 and $166.75 for materials and manufacturing.
Once costs such as marketing, tech support, and distribution are added into the total, IHS iSuppli predicts that Google "will at least break even" with its 8GB device which sells for $199, and will bring in a "modest profit" with its 16 GB Nexus model costing customers $249.
This backs up what Google's Senior Vice President of Mobile, Andy Rubin, said in regards to profits from the device. Rubin previously made it known that the company is not expecting much profit from the Nexus 7. "When it gets sold through the Play store, there's no margin," Rubin explained to All Things Digital. "It just basically gets (sold) through."
Although the 16 GB model only costs a meager $8 more to produce than its smaller counterpart, its higher price tag of a $50 increase will bring in a bit more than the 8GB device will.
With no profit to be made, this could be why retailers such as Staples are not selling the 8GB model, as the Google Play store is the only place customers can purchase the 8GB storage device.
In comparison to its competition, last year Amazon's Kindle Fire was predicted to cost $209.63 in production, meaning that Amazon lost $10 per tablet with each sale.
