Does Google's $199 tablet target $499 iPad or Kindle Fire?

Computerworld - As Google prepares to unveil a highly-anticipated 7-in. tablet for $199 at Google I/O today, a big question lingers: Is the new Nexus 7 intended to take on the $199 Kindle Fire, or the highly popular $499 iPad?

Bloomberg yesterday said that two unnamed sources confirmed that Google will unveil an Asus-built $199 tablet Wednesday at Google I/O in San Francisco.

The sources told Bloomberg that Google is aiming the new tablet at Apple's iPad.

Meanwhile, Gizmodo Australia reported on Monday that it had obtained training documents that laid out many details of a new Google tablet.

The report said the Nexus 7 will run the latest Android version, Jelly Bean, and a high-end Nvidia Tegra 3 quad-core processor. The documents also revealed the $199 price tag for a low-end version, Gizmodo Australia said.

Subsequent speculation has said the Nexus 7 may use Nvidia's Kai reference design with cheaper memory, and include a low-cost display with power-saving features that rely upon the 1.3 GHz Tegra 3 chip, to maintain a price in the $200 range.

That design is intended to produce a tablet in the $200 price range.

The training documents and photos obtained by Gizmodo Australia also show Nexus 7 contains only one camera, not two as some tablets have. The device also includes no SD or HDMI ports and no 3G or 4G radio -- all to help reduce costs, according to the documents.

The Nexus 7 would come in 8 GB or 16 GB versions, offering less storage capacity than some high-end tablets.

An IHS iSuppli analyst estimated the device described in the documents could cost Google and Asus between $130 to $210 for materials and manufacturing.

The manufacturing cost structure and the $199 price tag indicate that the Google device is intended to take on the 7-in. Amazon Kindle Fire tablet, not the 9.7-in. iPad that starts at $499, said Tom Mainelli, an analyst at IDC.

In 2011, the iPad commanded 59% of the global tablet market, while Amazon had 6.9%, IDC said.

With the combination of a high-end Tegra 3 quad-core processor and other cost-efficient features, the Nexus 7 could be a winning piece of hardware, but it has to compete against tablets coming from Asus and Acer with similar price tags and functionality, analysts have noted.

The 7-in. Acer Iconia Tab A110, shown at Computex earlier this month, is expected to sell for less than $200, and will also include a quad-core Tegra 3 processor.

Because hardware in tablets can be similar across brands, Gartner analyst Carolina Milanesi has said the pressure will be on Google to offer differences based on software, apps and services.

"The hardware is only part of the recipe," Milanesi said. "Apps, an intuitive user interface and sleek hardware [together] make a winner."

How Google positions its new tablet in the market should be laid out at Google I/O, which kicks off with a keynote at 9:30 a.m. PDT today, followed by a session on "What's new with Android" at 11:45 a.m. PDT.

Computerworld will be following both sessions, tweeting updates at #io12 and offering complete report and blog coverage throughout the remainder of the week.

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 mhamblen@computerworld.com.

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