Google's Nexus Tablet May Prompt Competitors to Cut Prices

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With Google's rumored $199 Nexus tablet possibly entering the market in 2012, other entry-level tablet vendors might be pressured to lower their prices.

Google has reportedly paired up with Asus to manufacture a device that will go up against Amazon's Kindle Fire - but might also pressure other companies like Acer, Lenovo and Samsung to lower their prices. On average, the gross margin of tablets is about 10 to 15%, but with general price drops and manufacturing component price increases, gross margins are expected to rapidly decline. This would force manufacturers to compete over narrowing profits.

The Google Nexus tablet is alleged to go into production around April, and might ship in June. Google's annual I/O Conference takes place on June 27th, a forum where the tablet might be officially unveiled.

In related news, it has been reported that Amazon might release three new versions of its Kindle Fire this year - two new 7-inch models and one 8.9-inch model.

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