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Google (GOOG) announced its new Nexus 7 tablet this week at an event in San Francisco and with a link to a product site on the Google homepage. This means that millions of people are clicking through and getting a preview of the device today, and in the coming days. Google is making the tablet in partnership with Taiwan computer giant Asus, and plans to start shipping it in July.

The device can be pre-ordered now online through the Google Play Store. The key features are the 7 inch form factor with a 1280x800 pixel display, a quad core Nvidia Integra ARM CPU, and ports including Near Field Communications (NFC), WiFi, Bluetooth, micro USB, microphone, GPS, accelerator, gyroscope, and magnetometer. You can read more details about these features on the product site. Google will sell two models, one with 8GB of internal memory for $199, and one with 16GB for $249.

This is a strong tablet offering, and has been well thought out by Google. It offers a new version of Android developed by Google called version 4.1 Jelly Bean, and is designed to be fully integrated with popular Google services like Gmail, Maps, YouTube, and the tons of content available on Google Play like videos, music, e-books, games, and over 600,000 Android apps.

So how will this impact the competition? Google is going after Apple (AAPL), Amazon (AMZN), and Microsoft (MSFT) with this new tablet, and it potentially impacts each of them in different ways.

First Apple, which is the tablet market leader by a huge margin with the iPad line. Google is coming in with a very impressive competitor with a much lower price point, a comparable ecosystem of content and apps, and a 7" form factor that Apple does not yet offer. Many people feel that the 7" tablet is much easier to use, carry, and store, and does a fine job on the typical tablet uses of reading, watching videos, checking email, browsing the web, and playing games. The Nexus 7 at 1280x800 is a bit better resolution than standard 720pHD, and is very sufficient for the screen size.

Apple has a major problem now, because they don't have a solution anywhere near this price point, with the cheapest iPad going for $499. Apple is going to have to scramble to come up with a new smaller and cheaper iPad to compete. According to Apple's latest quarterly report, it sold 11.8 million iPads in the quarter, which at as ASP of $500 represents about $6B in Apple revenues. If Google becomes a significant competitor for iPad, this could strongly impact Apple revenue and earnings.

Next, Amazon. Give Jeff Bezos credit, he was the first to recognize that a smaller and cheaper tablet with less functionality than iPad but also a lower price would find a strong market. So the 7" Kindle Fire came out of the gate last fall at $199, and immediately became the best selling Android tablet with millions of units shipped since then. So Amazon showed the way, and Google has been paying attention. The Nexus 7 is a direct competitor to the Kindle Fire, with far superior features and performance, for the same price. And the Google ecosystem is very comparable and in some ways superior to Amazon's.

So Amazon has a couple of choices: lower the price of the Kindle Fire, or come out with some new Amazon models, which they are preparing to do now. Amazon's revenues could be impacted, not so much because of loss of Kindle sales, but because of the loss of revenue on content and e-commerce orders that would go to the Google Play store instead.

Finally, Microsoft. Google did not know they were going to be up against Microsoft directly until 2 weeks ago, when Microsoft announced their new Surface tablet products. But they did know that lots of new tablets are going to be coming out using the new Windows 8 slated to be released later this year. So Google took it on themselves to create their own upgraded version of Android to compete with Win8, and release it on their new tablet. Google will have to continue to innovate on Android to battle Microsoft, and Microsoft will have to do the same.

The Surface tablets are 10" high-end models that support Microsoft Office and other Windows apps, which Google cannot do. Still Microsoft, or its OEM partners will also need to come out with a smaller form factor low-cost model to compete with Google. Microsoft's revenue is likely to go nowhere but up, because they are not seriously competing in the mobile space yet, so everything they sell will be a dollar coming out of the pockets of Google or Apple.

So now the big picture looks like this: Google and Apple are battling for the high-functionality-tablet users, Google and Amazon are battling for the low cost tablet users, and Google and Microsoft are battling for the tablet and mobile operating system market. This increased competition will be good for all of us technology consumers. Let the games begin.

Source: Google Nexus 7 Tablet Targets Apple, Amazon, Microsoft