ASUS co-branded the Nexus 7 to increase brand value

According to analyst Thompson Wu of Credit Suisse, ASUS are using the close partnership with Google and their recently-announced Nexus 7 tablet to enhance their brand rather than just the desire to make money.

Production cost is said to be roughly $200, and the Nexus 7 sell for $199.99, meaning ASUS are breaking even on every tablet sold. Usual OEM business methodology would be vastly different, but ASUS are looking to build their brand in a system where OEM's "have limited opportunities to differentiate" from the brands ASUS are making hardware for.

Wu says:

We believe Asustek realizes that in a market where OEMs have limited opportunity to differentiate without content and operating systems, it's demonstrating its edge via research and development and innovation, while building upon its brand value.