Google's Nexus 7 could force Apple's hand on 'iPad Mini'

Apple doesn't have the luxury of ignoring the 7-in. tablet market, says one analyst

Google's new Nexus 7 tablet may be aimed more at Amazon and its Kindle Fire than Apple and its iPad, but Apple will not be able to ignore the low-end of the tablet market dominated by 7-in. devices, analysts said today.

"They're going to have to care about that market," said James McQuivey of Forrester Research. "I don't think Apple will have the luxury of ignoring the [7-in.] form factor entirely."

Earlier today, Google unveiled the Nexus 7, a 7-in. tablet manufactured by ASUS, that is now available for pre-order, with tablets shipping in mid-July. Prices for the Nexus 7 range from $199 for an 8GB device to $249 for a 16GB model.

Those prices, as well as almost every specification and feature Google revealed today, had been leaked before the kick-off of the Google I/O developer conference.

"It's a sweet device, there's no doubt about that, but it's more aimed at Amazon than at Apple," said Ezra Gottheil, an analyst with Technology Business Research. "It's an aggressively-priced tablet."

Amazon's Kindle Fire, which the e-tailing giant launched late last year, is also a 7-in. tablet that starts at $199. Analysts now expect Amazon to update the Fire in the next few weeks.

But the Nexus 7 isn't taking on the iPad, 9.7-in. tablet, which starts at $499, or even last year's iPad 2, which Apple continues to sell in a 16GB configuration for $399.

"They're not going after the moment," said Michael Gartenberg of Gartner. "But they're definitely competing with the Fire."

"Google has nothing [in the Nexus 7] on the iPad, of course," echoed McQuivey.

But the entry of Google, the success -- especially during the 2011 holiday season -- of the Fire, and the increased attention by rivals to the 7-in. form factor will force Apple to launch its own tablet in that size later this year, said the analysts.

Rumors that Apple will debut a 7-in. version of the iPad, dubbed by many the "iPad Mini" -- perhaps a sop to the Mac Mini desktop computer it sells -- have circulated almost since the 2010 launch of the first-generation iPad.

Increasingly, analysts have concluded that Apple will reveal such a device. Today's announcement by Google has pushed their opinions to the "certainty" line on the probability meter.

"[The Nexus 7] makes it even more important that Apple has a reasonable response," said Gottheil, who predicted that Apple will launch an iPad Mini this fall, before the start of the end-of-year sales season, at a price point between $249 and $299.

Google's debut of the Nexus 7 won't change Apple's plans, said Gottheil, who is one of the experts who has long-believed Apple will make a move into the smaller format. But it will focus their attention, added McQuivey.

"Between the Fire and the Nexus 7, 10 to 12 million of these will be in people's hands by the end of the year," said McQuivey. "That will pale in comparison with the iPad numbers, but Apple will start to feel it."

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