Asustek co-brands Nexus 7 to increase value of their own brand
Asustek and Google are partners in the development and distribution of the Google Nexus 7, and, according to analyst, Asustek is utilizing the co-branding opportunity to enhance their brand rather than to make money.
Asustek and Google are partners in the development and distribution of the Google Nexus 7, and, according to an analyst, Asustek is utilizing the co-branding opportunity to enhance their brand rather than to make money.
The price tag of a Nexus 7 will be $199.99, and that’s the same price as the production cost. Now, why would an OEM produce a co-branded device for no profit, and hoping just to break even? An analyst, Thompson Wu of Credit Suisse, from Taiwan suggests that Asustek is not aiming to net any profit from the Nexus 7. Contrary to traditional OEM business methodology, they are seeking to build their brand in a system where OEMs “have limited opportunities to differentiate” from the brands which Asustek is making hardware for.
“We believe Asustek realizes that in a market where OEMs have limited opportunity to differentiate without content and operating systems, it's demonstrating its edge via research and development and innovation, while building upon its brand value,” Wu says.
Asustek has already cemented itself as a high quality OEM, but perhaps they are aiming for something more. Perhaps they want to totally dominate the Android tablet market, and the recent flood of Asus-branded Android tablets is testimonies to how “valuable” the Asus brand is.