June 28, 2012, 2:18 PM — Google's $199 Nexus 7 tablet is a device that's more than a competitor to Amazon's Kindle Fire, but is not on the same scale as the Apple iPad -- at least not yet, analysts said Wednesday.
The secret to Google's success with the Nexus 7 will come down to the apps that developers build for it, and how successfully Google integrates the tablet into its Google Play cloud-based media and apps repository, analysts said.
"Nexus 7 is more than a Kindle Fire competitor, but certainly no iPad killer," said Jack Gold, an analyst at J. Gold Associates.
Google has "shown an interest in building a presence in the tablet market and using [its Google Play] content to differentiate the hardware," said Carolina Milanesi, an analyst at Gartner.
"Fire happens to be the device Google competes against at the moment, but let's be clear: Google did not do this because they are worried about the Kindle Fire," Milanesi added. "They did it because they need to be successful in the tablet market, and we have seen that $199 is a sweet spot."
Gold said he was impressed that the Nexus 7 has a high-quality Tegra 3 quad-core processor, and that Google could still keep the price for the 8GB version below $200. Google is also selling a 16GB version for $249, and both are on sale at the Google Play site, with delivery set for mid-July.
Gold said the 1280 x 800 screen is "reasonable, but not the highest quality out there" without high definition, but he still called the Nexus 7 a "credible contender at a good price that should help Google get a kickstart in the Android tablet market."
The Fire from Amazon sells for $199 and also has a 7-inch screen. An updated version is expected in July from Amazon at possibly a lower price. The Fire has about 7% of the global tablet market, according to IDC, while the $499 iPad, at 9.7-in., has about 60% of the market -- a bigger target for Google.
"Google just cut [Kindle Fire's] knees off with this Nexus 7," said Ken Dulaney, also a Garnet analyst. "The going will be very tough for the Amazon Kindle."
Amazon did not immediately respond to a request for comment.