Any time Google (or any other major corporation) sells hardware at under a 20% margin, they are subsidizing their sales with revenue profit from other divisions, or the future potential of profit. It's important to note that you need to cover R&D, G&A, Marketing, etc... beyond that marginal cost. The exception would be in situations where you could make up the lost margin in huge volume (commodity sales, wholesaling, retailing other people's product). Google's average margin from other units of their business is 30%+, so it would make sense for them to invest in those business lines, unless their are some strategic reasons to focus on the tablet market - which, I'm sure, we all recognize there is.
To put it more clearly - Google is not selling tablets to make a profit on hardware. They are selling tablets so they can profit from search/advertising through those tablets.
Re: Google Voice on older IOS equipment. I installed it on my iPhone 4 today - it runs significantly faster than Siri on an iPhone 4S. Search results are instant, as well. Completely agree with you that this is an example of where the disconnect from hardware greatly benefits the consumer.
To put it more clearly - Google is not selling tablets to make a profit on hardware. They are selling tablets so they can profit from search/advertising through those tablets.
Re: Google Voice on older IOS equipment. I installed it on my iPhone 4 today - it runs significantly faster than Siri on an iPhone 4S. Search results are instant, as well. Completely agree with you that this is an example of where the disconnect from hardware greatly benefits the consumer.