Even so, some analysts said Google starts with a disadvantage over both Amazon and Apple. "Google's user base for music, books and movies is not nearly as strong as Apple or Amazon, so it will take time to build a strong customer base," said Frank Gillett, an analyst with Forrester Research.
"Google's real tablet problem is the lack of compelling tablet-optimized apps, and Google has yet to address how to motivate developers to fill the gap," Gillett added.
James McQuivey, another Forrester analyst, said Google will need Google Play content and services and video content from YouTube to succeed. "That range of services will be the secret to stitching together a rag-tag fleet of Android gadgets into a platform that can compete with Apple for minutes of users' attention," rather than requiring users to pay premium dollars for an iPad or other more expensive device to do so, he said.
Google also picked up the low-price lesson from Amazon with its Kindle Fire, McQuivey said. "Google can see that the only way to beat the premium-worthy iPad is to go for the millions of customers who are ready for smaller and cheaper tablets," he said.
The Nexus 7 uses a reference design from Nvidia called Kai. The design is intended to use the Tegra 3 processor to increase battery life and offer a "premium experience" in a low-cost tablet, an Nvidia spokesman said. Nvidia also has a blog on its website that explains how the Nexus 7 uses the Kai design.
Forrester expects 191 million tablets to be in use globally this year. By 2016, that number is expected to jump to 760 million tablets. In 2012, Forrester said the iPad will reach a 68% tablet share globally, with Android at 16%. By 2016, iPad will drop to 53%, while Android will drop to 8% and Windows tablets will take 18%.