Asus' Chairman Jonney Shih and Google's head of Android Andy Rubin have revealed that the Nexus 7 is being sold at cost, and was built in just four months. "Our engineers told me it is like torture," Shih tells All Things D. Asus was told that the Nexus tablet was to be ready in four months, must be high-end, and should not cost over $200. "They ask a lot."

Rubin says that only Asus could move that fast: "we went from zero to working product in four months." He admits to being frustrated at the lack of Android tablet sales in the past, but says Google now has a full ecosystem in place that will allow users to consume media on one of the company's tablets. "I think that was the missing piece."

"there's no margin, it just basically gets sold through."

It's clear to all that Google is pitching its tablet as a direct competitor to Amazon's Kindle Fire. However, unlike the Fire, the Nexus 7 has a quad-core Tegra 3 SoC and a 1280 x 800 laminated display — so how is Google selling it at the same price? "When it gets sold through the Play store," says Rubin, "there's no margin, it just basically gets (sold) through." All Things D elaborates that Google is also absorbing the marketing costs associated with the device. When asked if he thinks this cost structure will make life difficult for other Android manufacturers to sell tablets, Rubin insisted there is "plenty of room left for Android tablet innovation."