Next to politics, perhaps no industry loves speculation more than tech. We may couch it as “analysis” or — if we’re being especially honest with ourselves — as “commentary” or “opinion.” But at its best, even when fact-based, it’s informed guesswork.

Which leads me to the latest rumor of a Google Nexus tablet.

Digitimes was among the first to report that Google has cut a deal with Asustek Computer to create a seven-inch, Android (‘natch)-based tablet, allegedly launching in May or June, reportedly costing $199, and purportedly designed to put price pressure on Amazon and other tablet makers. The Wall Street Journal and others followed reportorial suit.

But rather than put price pressure on Amazon and its Kindle Fire, as some are speculating, it may have the opposite effect: legitimize the low-cost tablet market in the U.S.

Inexpensive Android tablets are coming out of the woodwork, internationally. Perhaps the most prominent effort is in India, where the US$50 (US$35 subsidized) Aakash tablet was launched to great fanfare last year, but stumbled when early models manufactured by U.K.’s DataWind were deemed sluggish and fragile. Yet India’s government has decided to press ahead with the next batch — and it’s prompted at least one other Indian company to introduce a more-capable $100 Android tablet.

Similarly, the famous (some might say infamous) One Laptop Per Child initiative showed off prototypes of the $100 XO-3 tablet at the Consumer Electronics Show in January. Designed for kids in developing countries and supposed to be shipping this year, the XO-3.0 sports an 8″ screen, 4GB storage, and either Android or OLPC’s Sugar OS. And, of course, a hand crank when conventional power isn’t available.

Tablets alone don’t a market make. But education ministries certainly seem interested in creating one. Thailand’s Ministry of Education has announced it will give every first grader a tablet — and plans to buy 900,000 of them. Australia has outfitted every grade 9-12 student with either a tablet or laptop this year as part of its Digital Education Revolution program. And South Korea, even though it’s backed away somewhat from earlier plans for the youngest students, still wants to start replacing textbooks with tablets in 2014.

What has all this got to do with Google and Amazon?

In the U.S., the standard for tablets has been set by the iPad. Which is great for Apple and for all who want its admittedly impressive, large screen and cutting-edge feature set. But an iPad, at roughly $400-600, is pricey. Too pricey for many.

Imagine how much bigger the market could be if it had two tiers. The top iPad-like tier for the latest tech. And a second, more entry-level tier, one with much of the same feature set, form factor and content, but at one-third to one-half the price.

It could, among other things, help education continue to adopt new tools. Despite some back-and-forth on whether tablets would actually save schools money (a report cited by AllThingsD from today’s Federal Communications Commission and U.S. Department of Education digital learning summit includes both pluses and minuses, as does this thoughtful analysis by education industry exec Lee Wilson), education is going digital for more reasons than just pixelating textbooks.

And less expensive helps overall adoption. Imagine how much demand could be met, and penetration grow, beyond the latest estimates of 19% of U.S. adults owning a tablet and 25% of college students.

That’s what a $199 Google Nexus tablet could do for the market — make the Kindle Fire’s price less of an outlier, and more of a solid, expected and welcome device baseline.

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  • Anonymous

    Amazon has a robust eco system for the delivery of a wide variety of content that will be prohibitively expensive to duplicate except for books, movies and video games. If google partners with a carrier to provide 4G service in a bundle at a low cost, that would be a game changer. The Apple fan base will never accept a hardware competitor so a service bundle at a zippy price will have to be the selling point.

    • FrankCatalano

      I think that’s true for pure content consumption (or, as some archaically call it, “entertainment”). But I suspect a solid low-cost, yet functional, Android tablet that isn’t purely designed to sell from a content library will open up a whole host of opportunities at an entry-level tier, assuming it’s responsive enough and the screen is considered either good enough or large enough for other uses.

      • Guest

        Does Google aspire to be the next Apple or the next Gateway?

        Frank, there’s no money to be made selling all-purpose tablets. The winners of the 2010s will be known for taking commodity hardware devices, building compelling monetisation opportunities atop them, and winning customer loyalty. Apple has succeeded at this. Amazon is well on its way to becoming the second pillar in third-generation computational devices. What can Google add to this market?

        • FrankCatalano

          I could argue that point either way. But it seems to me that new opportunities surface — ones which weren’t immediately apparent when a new device type launches — as power increases, price decreases and penetration accelerates. 

          Original smartphones were seen as only good for making calls and for email. Now they’re effectively multi-purpose computing devices with an app ecosystem, having gone form special- to general- purpose.

          A selection of tablets at two distinct price points might generate similar creative, downstream uses. 

          • Guest

            Take a look at what’s coming out for iPad, a $499 device with so many restrictions. You see beautiful, creative apps that make their developers deservedly rich.

            Now take a look at what’s released for Android. When men buy an Android device, what do they do? They hack, mod, and steal. It’s a well-known fact that on most Android tablets, which are not made for monetization, customers are not interested in buying quality software and services. They simply want to use these tablets to run stapled-together OS mods with untrustworthy names like “Cyanogen” and pirated copies of apps that have been half-assedly ported from iPad.

            Google Nexus Tablet, were it to appeal solely to the hacker, modder, and thief market as you suggest, would represent a major cost center for Google. I’ve already asked my contacts at Google to discontinue work on it for the sake of the company.

          • FrankCatalano

            I didn’t suggest it would appeal “solely to the hacker, modder and thief market.” Unless you consider education and mass market consumers all fall into that category, of course.

          • Guest

            Frank, the “education market” is a fallacy. Even in supposedly-wealthy districts, there isn’t enough money to buy Android tablets after you pay all the support staff — such as the teachers on disciplinary leave who are literally sitting in a room all day.

            And the mass market? Frank, you and I know what the masses want. I hope one day that Google will.

          • FrankCatalano

            Incorrect on the education market; there are many districts piloting or implementing tablets today. And I suspect that’s enough shadow-boxing with an anonymous guest for now.

          • Anonymous

            Have you actually looked at whats going on in the education market?  There is a strong shift to delivering course material to students via some sort of computing device.  Tablets are perfect for these applications.  The iPad has made inroads and a much cheaper tablet device will do even more so. Locally, Shorewood HS has equipped every student with an iPad and Shorecrest is scheduled fto do so next year. The cost of classroom based education is going up but on-line courses really can cut those costs.  Expect an increasingly larger percentage of all instruction delivered on-line and most likely via tablets.

      • Anonymous

        Permit me to step back. I consider all tablets content delivery devices, just my opinion. For generating content I consider tablets inferior to any kind of laptop with a keyboard. Try typing a paper or a long letter on a tablet and you of course know a power point slide is out of the question.  I own a laptop (several) an I pad and a Amazon Fire so my assessment is first hand with experience.  Tablets are solid for a movie, a quick e-mail, surfing the net (and I guess a game) so its functionality is limited by its design.  Again my opinion, I don’t see a big difference that the OS makes on a tablet nor a huge value added in devices based on apps available.  

        Back on point what new Google can bring to the table is unclear and if through their partnerships it is a different piece of hardware at a lower than Apple price, so be it. 

        Since I am a sample of 1 predicting the market is impossible and BTW I just purchased a simple Kindle for reading books and I am of the opinion that e-ink is the best display with power consumption for that function. 

        The convergence of functions to a single device is IMO a long way off and the prices being what they are a device optimized for specific purpose is the path I am taking. I keep my swiss army knife in my tool box and not my brief case (but that is because of TSA) :)

        • FrankCatalano

          I think tablets, in many cases, have gone beyond behind content delivery devices and there are a lot of good examples (and apps) to turn them into content creation devices. Not to mention many providers of accessory case/keyboard combos that get rid of the   awful screen typing experience.

          By the way, I agree — I would never give up my Kindle for actual casual reading, even with a tablet. Just because eInk is so much easier on the eyes. 

  • FrankCatalano

    Update: As with most rumors, this is one of those moving targets. Latest word is that the tablet is now $249, now July, still Google and Asustek: 

    (But in reality, who knows?) Still a solid second-tier price point.

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