I don't see why people think google are going to struggle to get this out for $200.
It is essentially galaxy nexus hardware without cell phone modem, a much smaller battery, and a small LCOS display instead of the large 720p AMOLED one. Yes, there will be higher non-recurring engineering costs with glass- fitting it into such a small space- but if they plan to go fairly mainstream these costs shouldn't cause too much of an impact on the unit device cost. Once you get into mass manufacturing, the marginal cost of making another one should be quite a bit lower than a current smartphone; as they are eliminating or massively reducing the cost of many of the major components.
If we look at google's track record, they haven't shown much desire to become a hardware company (that is, make the bulk of profits from selling hardware). Taking into account what google have been willing to price the nexus 4 at, with better hardware all round, I believe google are definitely capable of doing $200 unsubsidised if they want to. I can see $99 possible in the future.
I agree, I don't think it's crazy to think of them selling this at a $200 price point. They've shown time and again that hardware is just a way for them to spread their software, and this is just an extension of that philosophy.
As for the author's point about google moving away from advertising, he's nuts. I think google realized that advertising in this setting would be way too intrusive at the get go, but I'm sure they'll work it in over time.
It is essentially galaxy nexus hardware without cell phone modem, a much smaller battery, and a small LCOS display instead of the large 720p AMOLED one. Yes, there will be higher non-recurring engineering costs with glass- fitting it into such a small space- but if they plan to go fairly mainstream these costs shouldn't cause too much of an impact on the unit device cost. Once you get into mass manufacturing, the marginal cost of making another one should be quite a bit lower than a current smartphone; as they are eliminating or massively reducing the cost of many of the major components.
If we look at google's track record, they haven't shown much desire to become a hardware company (that is, make the bulk of profits from selling hardware). Taking into account what google have been willing to price the nexus 4 at, with better hardware all round, I believe google are definitely capable of doing $200 unsubsidised if they want to. I can see $99 possible in the future.