Late last year Google chairman Eric Schmidt commented to an Italian newspaper that "in the next six months [Google planned] to market a tablet of the highest quality". His statement generated much speculation primarily over whether Google planned on releasing a self-branded "Nexus" tablet or whether they would merely partner with a device manufacturer, such as Motorola, Samsung, or HTC.
According to a rumour from Taiwanese electronics daily DigiTimes, Google may be preparing to launch an "own-brand tablet PC...targeting Amazon's 7-inch Kindle Fire". Naturally, Google Taiwan has already released a statement indicating that it has "never heard about plans of launching an own-brand tablet PC".
Sources from Google's upstream supply chain believe that the 7-inch Android 4.0 tablet will launch late in the first quarter of 2012, with a price of less than US$199, putting it in direct competition against Amazon's Kindle Fire.
While a 7-inch tablet for $199 sounds like a good deal, Google may have to swallow a huge loss if it intends to make the tablet competitive in terms of features and speed. Right now the Kindle Fire is being lambasted for being slow and buggy, however it is only $199. I doubt Google could make a significantly better device for $199 without providing a heavy subsidy.