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This is not so unusual, typically in the home console market for example, consoles are not only not making a profit but are actually selling at a loss for the first few years of a systems life. Money is generated from accessories, games, etc. Google could make some killer apps for the tablet market and generate the money back easily. You don't make money from selling a razor, the money is in the blades.
2 years, 2 months ago on Google Earning No Profit From The Nexus 7