Why even Google can't keep the Nexus 7 in stock

You'd think Google had the cachet and cash to keep the Nexus 7 rolling off the line, but no dice.

Google’s Nexus 7 tablet, the best Android tablet by far, is doing quite well, in both reviews and in the market. So well, in fact, that Google has stopped taking new orders on the 16 GB version, after previously delaying shipments. It makes you (read: me) wonder why the Nexus 7, like many hardware hits before it, can’t keep up with demand.

The answer lies somewhere between Google’s retail experience, having devices made overseas, and expecting your buyers to want to use your device exactly as you anticipate.

The Guardian claims to have the inside scoop on what happened at Google’s Play Store. At least, it “understands” what happened:

The Guardian understands that Google's planners had thought that buyers on the Google Play store, more than from physical or online retailers, would be more committed to the company's "cloud" concept, and so would have more of their content stored online, rather than wanting to keep it on the device.

But most buyers appear to have noted that the storage on the device cannot be upgraded and decided to get the larger model.

Google saw its Nexus 7 much as Amazon saw its Kindle Fire, as a “portal” device that didn’t need much storage, because the real storage was on its own servers, dishing up music, movies, and other entertainment. But a pure Android tablet, such as the 7, can do much, much more with local files than a relatively hobbled Kindle Fire, and those experienced Android enthusiasts buying the device know that $50 for double the storage is worth it.

On the supply side, one should think back to the Wii. Remember Nintendo’s hugely popular game console, and, more specifically, what it was like trying to find one for a child or relative? Nintendo said at the time that it was facing an “abnormal” shortage, but would increase production “substantially.” But that was all just a kind of nice coat of paint on the hard truth of manufacturing, according to one analyst quoted by USA Today:

Nintendo also has to manage its inventory, said Colin Sebastian, an analyst with Lazard Capital Markets. "Unfortunately you can't ask a contract manufacturer to make a million a month, then 5 million," he said.

That’s because most of the makers Google is relying on for the Nexus 7 aren’t simply sitting on their hands between tablets. They’re busy, multi-client manufacturers, and Google must order enough components (hard-fought, sometimes rare components, including screens and processors and memory) to keep them supplied, but not so many that they go unused.

And, finally, Google isn’t used to seeing its Nexus offerings fly off the shelves. They’re pure Android skins, they’re “reference devices” for developers, and the first Nexus device Google sold directly, the Nexus One, was definitely a non-starter. But combine great reviews, a seemingly crazy low price, and availability in major retail outlets, and you see why the Nexus 7 is now in waiting list condition.

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