There has been speculation in the past couple of months on how Google (NASDAQ:GOOG) is working on a Nexus tablet. Apparently, some leaked documents reveal the exact details of the rumored Nexus tablet, branded the Nexus 7. The tablet is said to be manufactured by Asus and powered by a quad-core Nvidia Tegra 3 processor, and will come in two variants: 8 GB and 16 GB storage. It will be priced much lower than the iPad, at just $199 and $249, and will supposedly run Android Jelly Bean, the next iteration of the OS, and will likely be unveiled at Google I/O 2012 later this week. 
Apple, which has completely dominated the tablet space so far, may see its market share decline if the Nexus 7 turns out to be a hit. Microsoft is expected to price the Surface much higher than the Nexus 7, possibly even higher than the iPad, and target it at the premium segment. The Nexus tablet will compete directly with the Amazon Kindle Fire which is priced at the same level.
Having a flagship device like the Nexus could also help set a minimum standard for other manufacturers and help increase the bar for Android tablets.
While Google hardly generates any revenue from hardware sales, it stands to benefit if the increasing tablet penetration drives search query volumes, which in turn drive search advertising revenue for the Internet giant. We currently have a $680 Trefis price estimate for Google, which stands nearly 20% above its market price.Notes: