The Android tablet ecosystem was stuck in a chicken/egg problem where nobody would develop for it until there was a market, and they'd be no market until there

The Android tablet ecosystem was stuck in a chicken/egg problem where nobody would develop for it until there was a market, and they'd be no market until there are tablet apps. A successful Nexus tablet increases the value of the entire ecosystem. Also keep in mind that there -is- a margin for ASUS. Google's reference devices have always been a split where the OEM gets the hardware profit and Google controls the entire experience. The Nexus 7 follows the exact same model all of their previous efforts have.