Ina Fried

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Exclusive: Google’s Andy Rubin and Asus’ Jonney Shih on How They Cooked Up the Nexus 7

Building the Nexus 7 tablet was no easy task, says Asus Chairman Jonney Shih.

First off, Google gave the company only four months to build the product. Then there was the task of building a high-end tablet that could sell for just $200. Plus, he said, Google can be kind of demanding.

“Our engineers told me it is like torture,” Shih said in an interview on Wednesday, shortly after the Google-Asus joint project was announced. “They ask a lot.”

That said, Shih said his team has learned a ton from working so closely with Google’s engineers.

To pull off “Project A-Team,” as the tablet effort was known inside Asus, Shih sent people to work at various locations, including Silicon Valley. That put his workers closer to Google, and also allowed his engineering team to have a 24-hour development cycle. Even then, Shih said, he had to add another 20 people to the project. And then another 20.

Rubin gives Shih and the team at Asus immense credit.

“I don’t think there would have been any other partner that could move that fast.,” Rubin told AllThingsD. “We went from zero to working product in four months.”

But, having built the device, the big question now is will consumers bite?

Rubin admits that he was upset a year ago that Android tablets just weren’t selling. After looking into some of the reasons, Rubin learned that while hardware really matters on phones, consumers are buying into a content ecosystem with tablets. Or, in Google’s case, not buying into an ecosystem.

In particular, Rubin said that Google lacked some of the ecosystem pieces that were necessary, such as a full compliment of TV shows, movies for purchase, and magazines that people want to consume on a tablet.

“I think that was the missing piece,” Rubin said.

The amount of tablet-specific apps have also been an issue, but Rubin said Google is sticking with its strategy of encouraging developers to write a single app for both phones and tablets, while taking some care to make sure the layout and button size are optimized for larger-screen devices.

On the hardware side, Shih and Rubin feel they have something that can serve as a full-fledged tablet computer while competing on price with the Kindle Fire. Despite its bargain-basement price, Shih notes that the device packs a high-end laminated display, quad-core chip and other high-end features.

One way the companies managed that is through razor-thin margins. Google is selling the device through its Google Play store, essentially at cost, and also absorbing the marketing costs associated with the device.

“When it gets sold through the Play store, there’s no margin,” Rubin said. “It just basically gets (sold) through.”

However, it appears that the Nexus 7 is headed for retail shelves, as well, though only the plans for the Google Play store were announced on Wednesday.

While that kind of cost structure could make life challenging for any other hardware makers looking to sell Android tablets, Rubin insists there is plenty of room left for Android tablet innovation.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik