Google goes up against Amazon, Apple with Nexus tablet

GOOGLE-TABLET-NEXUS-7-ANDROID:Google goes up against Amazon, Apple with Nexus tablet

Google Inc will sell its first tablet from mid-July for $199, hoping to replicate its smartphone success in a hotly contested market now dominated by Amazon.com Inc's Kindle Fire and Apple Inc's iPad.

Google hopes its maiden entry in the tablet market, which will also see the advent of Microsoft Corp's Surface this year, will accelerate development of tablet-specific applications for its Android operating software and help it make headway against rival gadgets.

The "Nexus 7" tablet, built by and co-branded with Taiwan's Asus <2357.TW>, was one of several gadgets unveiled at its annual developers' conference on We dnesday, as the Internet search and advertising leader dips its toe into the intensively competitive consumer arena.

Google co-founder Sergey Brin demonstrated Google Glass, a futuristic-looking eye-glass-computer that can live-stream events, record, and perform computing tasks. The device will be available to U.S.-based developers for $1,500.

And it unveiled the Nexus Q -- a $300 device with a built-in amplifier that lets users stream content from Android devices onto their TVs.

But the Nexus tablet hogged the spotlight. Sold initially only on the Google Play online store, its $199 price tag and 7-inch stature is aimed squarely at the Fire, but the Nexus has a front-facing camera while Amazon's tablet does not.

Analysts consider the Fire a window into Amazon.com's trove of online content rather than an iPad rival, given the $499 that Apple asks for a device with a "retina" display that far outstrips it in terms of resolution.

Google can similarly use the Nexus 7 to connect to its own online offerings, which include YouTube and Google Play. It will go after more cost-conscious users who might shun the pricier iPad.

"They all but called it a Kindle Fire killer. They're clearly gunning for that No. 2 spot behind Apple's iPad that is currently occupied by Kindle," said Altimeter Group analyst Chris Silva. "But the con is they do not yet have a footprint in people's minds and wallets as the go-to place to purchase and consume media."

JELLY BEANS

Shares in Google gained 0.8 percent to $569.37 in afternoon trade.

The Nexus will feature the new 4.1 "Jelly Bean" version of Google's software, as well as a front-facing camera, a 1280x800 resolution screen, and an Nvidia Tegra 3 processor.

Google's Android software is the No. 1 operating system for smartphones, with about 1 million Android devices getting activated every day

But it has struggled to compete with Apple's iPad in the market for tablets, largely because it lags far behind Apple and Amazon in terms of available content and tablet-specific applications, such as games.

Executives showcased the new 4.1 "Jelly Bean" version of Android operating system on Wednesday. The new software delivers faster performance, according to the company, and new features such as "voice search."

"That range of services will be the secret to stitching together this rag-tag fleet of Android gadgets into a platform that can compete with Apple for minutes of users' attention rather than premium device dollars," said Forrester analyst James McQuivey.

The tablet's limited availability -- executives said they had no plans yet to expand distribution beyond Google's own site -- may curtail initial sales growth.

Google briefly sold a specially designed Android smartphone - the Nexus One - directly to consumers in 2010, but closed the online store after four months saying it had not lived up to expectations.

But it's the lack of "native" applications -- software designed with a larger tablet in mind, rather than ported from smartphones -- that is the Nexus' biggest impediment for now.

"Unless you have a strong app offering, for a consumer it is a piece of glass that does what a phone does on a larger screen," Carolina Milanesi, analyst at Gartner Research.

(Editing by Tim Dobbyn, Gary Hill and David Gregorio)