Google's Nexus 7 tablet may force a Windows 8-powered NOOK

Google's new Nexus 7 tablet appears to be a remarkable piece of hardware for its $199 pricetag, so much so that if Microsoft wants to survive in the consumer tablet market, it may need to build a similarly priced Windows 8-NOOK combination tablet.

It's remarkable what Google has managed to put into a $199 device -- Nvidia quad-core Tegra 3 processor, 1280 x 800 back-lit IPS display, solid build, eight hours of active battery use, and  the new Android 4.1 Jellybean under the hood.

Fellow Computerworld blogger JR Raphael notes that: "Its CPU and RAM setup is pretty much the same as what you see in most high-end, $600 Android tablets these days." He adds:

"When you look at this tablet compared to other devices in the same price range -- Amazon's Kindle Fire, Samsung's Galaxy Tab 2 7.0 -- everything else basically looks like crap."

How will Microsoft's Windows RT tablets compete against it? It'll be almost impossible. The RT-based Microsoft Surface is expected to sell for bewteen $500 and $700. At that price, most people will opt either for a similarly sized iPad, or else will make it easier on their wallets and buy the lower-priced Google Nexus 7.

Microsoft appears to be leaving it to its partners to build a smaller Windows 8 RT-based tablet, so if any 7-inchers will be released, expect them to sell them. But they won't be able to compete on price. Given the specs of the Google Nexus 7, Google is likely making no money on them, and is essentially producing them at cost, so that it can make money on content via Google Play.

Microsoft's partners won't be able to do that, especially given that Microsoft is said to be charging $100 for licenses of Windows 8 to tablet partners. There's no way a partner can build a tablet to compete with the Google Nexus 7 at $199, if the partner has to pay $100 to Microsoft.

The only hope for Microsoft is in its partnership with Barnes & Noble. Microsoft has invested $300 million in Barnes & Noble subsidiary called Newco, which will produce the NOOK. Given that Microsoft is part owner of Newco, it could forgo Windows 8 licensing fees, or else make them very low. It will make money on content, such as tying into Xbox Live. Barnes & Noble, meanwhile, doesn't need to make money on the hardware, because it will also make money selling content, so can sell a Windows 8-powered NOOK at cost.

Given that, a Windows 8-powered NOOK could sell for the same $199 price as the Google Nexus 7. That's the only way Microsoft will be able to compete in the consumer tablet market.

Google’s Nexus 7: First impressions

The Asus Nexus 7, Google's first tablet in the Nexus family, is here. You're looking at it right now. We just got our first hands-on pictures of the device... and you'll find impressions, more photos and video below.

There's not that much left to know about the Nexus 7, because all the details leaked out in grand fashion this morning and they're now all confirmed. Most importantly, the 7-inch tablet will come pre-loaded with Android 4.1 Jelly Bean, Google's latest operating system. Available in black or white, an 8GB version will be priced at $199, with 16GB for $249 this July. A quad-core Tegra 3 processor, 1280 x 800 IPS display, 1.2-megapixel camera, 1GB of RAM, and a 4,325mAh battery are also included, consistent with previous leaks. It's also got NFC, so you'll be able to transfer things to other Android 4.0 NFC devices with Android Beam.

The build feels really solid with a nice, grippy rubberized back and metallic-style silver trim. Even though the unit on display was tethered to a table, the Nexus 7 feels remarkably light. It's comfortable to hold, too, with just enough bezel to hold with two hands without needing to rest your thumbs on the screen, and light enough for one hand. The power button and volume controls on the right side feel snappy and responsive and lie snug along the frame.

The headphone jack (as well as the Micro USB charging port) have been conveniently placed on the bottom of the device, which will come as a relief for those annoyed by the top-mounted configurations of competing products. Other sides are mostly bare, but there are two distinct microphone holes on the top and right edges of the system, and four pogo pins which will inevitably let you dock the Nexus 7 for power and possibly a data connection. Even with the abundance of ambient light, the glossy IPS display is bright and readable, and viewing angles are fantastic. Asus has sourced some great displays recently, and the 1280 x 800 display here seems to be no exception.

The speaker isn't bad: a Verge editor who will go unnamed had Carly Rae Jepsen's "Call Me Maybe" ready in a Google Music account, and it blasted out of the slit in back of the device fairly crisply and loudly considering that we were in a large conference hall, and also bounced nicely off a table when we set it down. We'll have to see how it fares in a real-world environment. The placement of the speaker slit at the bottom of the back of the device does mean that you can block it and muffle the audio with your hand if you're holding it low, though.

Interestingly, there's no photo app on the tablet at all: the front-facing camera is strictly for video chatting and the like. Chrome must be out of Beta now, because it's the default browser on this device. Scrolling isn't bad, but it couldn't quite keep up with our thumbs. We're going to dive deep into Android 4.1 Jelly Bean now, so don't expect more updates here, but be sure to check out our video for more of the Nexus 7 tablet!