The shortage comes because Google was taken totally off guard by how popular the 16GB model would be. It had expected the $200 8GB model to be the big seller. That hasn't happened, though. Instead, the $250 16GB model has been a massive, surprising success.
This will probably be a minor setback at worst for Google and the Nexus 7. But hopefully it's also a wakeup call for Google and its competitors that the battle to catch the iPad isn't just a race to the bottom. More here.
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