Google (GOOG) unveiled its first tablet device and a slew of other products Wednesday as the Internet search giant aspires to become a consumer electronics firm.
Google's 7-inch $199 Nexus 7 will challenge Amazon's (AMZN) Kindle Fire, which is the same size and price. The market leader, Apple's (AAPL) iPad, starts at $399 — the latest version begins at $499 — but has a 9.7-inch display.
"We've seen an incredible market, where everyone has an iPad," said Martin Pyykkonen, analyst with Wedge Partners. "If something else is going to break that trend, it's going to be a lower-cost tablet.
The Nexus 7 will run the latest version of Google's mobile soft ware. Android 4.1, or "Jelly Bean," also was revealed Wednesday at the company's I/O developer conference in San Francisco.
Google also unveiled the $299 Nexus Q media hub, which will connect multiple mobile devices to Google users' media stored in the cloud by streaming it on TVs.
It also said that Google Glass, a computer-like product worn as glasses, will be available to U.S. developers in the next year with a $1,500 price tag, said co-founder Sergey Brin.
The new hardware has been built for integration with Google Play. Along with music, the digital store now will offer subscrip tions to TV shows and magazines.
"We wanted to design a best-of-Google experience that is optimized around all this great material that is in Google Play," said Hugo Barra, Google's director of product management, who demonstrated high-definition video on the 1280 x 800 pixel tablet.
Google shares rose less than 1% to 569.30 on the expected tablet.
The Nexus 7, weighing 340 grams or less than a pound, is being made by Taiwan's Asustek.
But the Nexus Q is the "first consumer product that Google has designed and built from the ground up," said Joe Britt, Google's engineering director.
"It's the world's first-ever social streaming device," Britt said.
Like other tablet makers, Google will sell the Nexus 7 via its online store, with both it and the Nexus Q shipping in mid-July.
The Nexus 7 has a camera on the front and back. The Kindle Fire only has the latter. Amazon reportedly will debut its second Fire in July and cut the first-generation tablet to $149.
Microsoft (MSFT) recently revealed its own tablet. Using the upcoming Windows 8 OS, the Surface will be priced more like an iPad.
By getting its new devices into consumers' hands, Google can sell more media via its store, which will be in more direct competition with Apple's iTunes and App store, says Sameet Sinha, analyst with B. Riley & Co.
"It's critical, if you speak to most publishers, that these devices improve the publishing and streaming experience," Sinha said.
The Nexus 7 also will be yet another delivery device for Google advertising, which hasn't been as successful on mobile as on desktop browsers. Its cost-per-click rate fell 12% in Q1, as more users were seeing less expensive ads on their wireless devices. But advertising on a tablet is expected to have higher rates than on cell phones, says Pyykkonen.
"So the goal with a tablet is to give this a low price and then monetize it through advertising," he said.
Google says 1 million Android-based devices are activated each day, up from 400,000 a year ago.
Its Google+ social network, which launched a year ago, now has some 250 million users, about 150 million of which log on at least once a month. Most of those active users are accessing Google+ on their mobile devices, though still not for that long.
"Active Google+ users are now spending 12 minutes a day in the stream, up from just nine minutes a few months ago," said Vic Gundotra, senior vice president of social business.