A Nexus Android Tablet May Be Closer Than You Think

It seems like just a matter of time before Google (NAS: GOOG) comes out with an official Android tablet bearing its Nexus branding and setting the bar for all Android brethren to follow in assailing the Apple (NAS: AAPL) iPad fortress.

Google Chairman Eric Schmidt virtually confirmed the existence of such a device when he told an Italian newspaper in December that "in the next six months we plan to market a tablet of the highest quality." There were also questionable reports from good old questionable Digitimes that Big G was setting its sights squarely on the only Android tablet that's flying off (digital) shelves: Amazon.com's (NAS: AMZN) Kindle Fire.

Well, it looks as if the dubious Taiwanese publication may be able to add a notch to its accuracy count, since DisplaySearch analyst Richard Shim tells CNET that the search giant is planning on beginning production on a 7-inch device in April, with an initial run of 1.5 million to 2 million units. It would feature a sharper display than the Fire, at 1280 x 800.

The biggest strategic question is whether it will go for the low-end market with a $199 price point as Digitimes maintains, especially since "highest quality" and a $199 asking price are typically mutually exclusive. Shim is out on that one, saying, "I don't know how they plan on marketing it -- if it's going to be a premium device, or if it's going to be a Kindle Fire-type competitor."

Assuming that Google is indeed aiming for official tablet entry, it's a tough spot to be in, since the Android tablet market is in dire need of some leadership, and the Fire marches to the beat of its own drum. At Mobile World Congress, Android head Andy Rubin said, "2012 is going to be the year that we double down and make sure we're winning in [the tablet] space." Google obviously knows something needs to be done.

Going after the Fire with a higher-quality offering at the same low price tag could derail Amazon, but it could also cripple the prospects of other OEMs, since their bottom lines primarily come from hardware margins.

A Nexus tablet priced at $199 would simply set the bar too low.

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At the time thisarticle was published Fool contributorEvan Niuowns shares of Amazon.com and Apple, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Apple, Amazon.com, and Google.Motley Fool newsletter serviceshave recommended buying shares of Google, Apple, and Amazon.com and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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