The second-generation Nexus 7 tablet, powered by a Qualcomm Snapdragon processor, will be launched around July, according to two unnamed sources in a Reuters report.
The Android device will be made by Asustek, and Google hopes to ship 8 million of them in the last half of 2013, according to the report.
Reuters filed the story from Taipei, where Asustek is headquartered.
The sources were said in the report to have knowledge of the product, but were not authorized to talk publicly about it. Reuters frequently quotes unnamed sources about technology initiatives. and the resulting stories are mostly accurate in every detail.
The Reuters sources said the new Nexus 7 tablet will have a higher screen resolution, a thinner bezel and runs the Qualcomm chip. The Nexus 7 device released last June runs Nividia's Tegra 3 processor.
Nvidia and Qualcomm regularly compete for tablet chip contracts. Qualcomm is by far the dominant supplier of smartphone processors.
"Competition is intensifying" for tablet components, said Len Huang, an analyst at IDC. "Losing Nexus 7 is not a huge blow to Nvidia or irrecoverable since there are many tablets. Nvidia will bounce back strong, but I can't imagine it's all too pleasant now in Santa Clara for Nvidia."
The new tablet could sell for $199, with the first-generation Nexus pricing dropped to $149, the report speculated. The sources also suggested that the new one might sell for $149 and that the first model could be discontinued.
The original Nexus 7 sold more than 4 million units in the last half of 2012, several analysts have said, which would be more than half of the predicted sales for the coming device. Google has not confirmed any sales figures for the Nexus 7.
Google, Asustek, Qualcomm and Nvidia could not be reached to comment on the Reuters report.
Google's 7-in. Nexus tablet model competes with other tablets in the 7-in. range, such as the 7.9-in. iPad mini, which starts at $329. Amazon, Barnes & Noble and Samsung also offer low-priced Android-based 7-in. tablets. Kindle Fire pricing starts at $159.
Amazon, Google and Barnes & Noble have developed a clear strategy of selling low-cost tablets to promote content that runs on them, including books, movies and advertising, several analysts said.
Huang said Google also recognizes the value of the 7-in. Nexus 7, while also selling a 10-in. Nexus 10 that starts at $399.
"Google's strategy goes beyond advertising," Huang said. "Most of the tablet market is shifting to a smaller screen size and obviously that's to have more aggressive prices. The entire market is going to smaller, less costly devices."
Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed . His e-mail address is email@example.com.