Review: Google's New $199 Killer Tablet

NEW YORK (TheStreet) -- This is a 7-inch tablet made by Asus that is running the pure Google (GOOG) "Nexus" version of Android, and it will be shipping within the next couple of weeks. You can buy it directly from Google for a bargain $199 by going to play.google.com and order it already.

The first thing on the investor's mind is of course: Is this a threatto Apple ( AAPL) and Amazon ( AMZN)? The answer is yes, but with some caveats with respect to Apple. This little tablet powerhouse offers most of the iPad's performance at the price of the Amazon Kindle Fire, which is a powerful proposition -- for those who have a chance to try it.

But for many reasons, in its current format it will not knock Apple off its market-leading position. Let's just start with marketing. A tablet is something most people buy only after havingtouched it and played with it. The place to do that is the Applestore. Game over.

Google doesn't have stores, and physical retailers who may carry thistablet in the future are, in the consumer's minds, relatively seedyplaces such as Fry's and Best Buy ( BBY) -- simply not in the same league asthe Apple stores. The only competitor to those are the Microsoft ( MSFT)stores, but there are only 20 or so of those, and obviously they won'tbe carrying this Google-based product.

I will be discussing the actual product metrics below, but untilGoogle opens 500 or so stores world-wide, in premium locations, justlike Apple, it can offer a superior product all day long, at lowerprices, and Apple will remain the market leader. Google has tensof billions of dollars in cash, and this is the best way invest it,capische?

All right, so what about the actual product? The answer is that it is excellent. Class-leading. Second to none. Let's start by outlining the positives:
  • 1. Basic physics: Unlike the iPad, this tablet is very light, so youcan easily hold it with one hand. It's also got an outstandingrubberized back, making it non-slippery. While the iPad is slipperyand requires a protective cover, the Asus Nexus 7 is light and grippy. The overall quality feel is essentially flawless. The price is $199,but it feels like $499.
  • 2. Screen: 800x1280 in a 7-inch form factor is not as good as thenew iPad 3, but it's close enough. It is not the best display in theindustry, but 99% of users will not have any complaint at all.
  • 3. Ports: There is really only one thing of note here, and that isthat this tablet may be the first after the BlackBerry PlayBook tocharge via standard MicroUSB. I ranted about this before in this article from March 24, 2011. Anyway, this is a huge relief compared to almost every other tablet inthe market. You no longer have to keep track of a separate chargerfor the tablet. Just use the same one that works with everysmartphone in the market -- except the iPhone, of course.
  • 4. WiFi: Here is a bit of a sad note. The Asus Nexus 7 supportsonly 2.4 GHz -- not the much more capable 5 GHz version of 802.11nWiFi. It is funny that Google would introduce this device, and handout some 6,000 units to developers, at its annual i/o event in SanFrancisco, when their conference attendee name tag reads as follows:"To avoid excessive interference on the 2.4 GHz frequencies and ensureyourself the best connectivity experience at Google I/O, we recommendthat attendees use 5 GHz capable WiFi devices wherever possible."
    Yeah, except the device you just handed out to those 6,000 people.According to Google: "Good for me, but not for thee."
  • 5. Cellular connectivity: None. This (initial) version of the Nexustablet is WiFi-only. Expect future versions to have LTE as well as tocome in larger screen sizes -- 8, 9, 10 and perhaps 11 and 12 inchesas well.
    The lack of embedded cellular data modem is a serious drawback forthose of us who primarily use our tablets when we are on the go -- butalmost never at home. At home, we have this wonderful thing called alaptop -- and in particular the Google Chromebook made by Samsung,which boots up instantly, as opposed to Windows and Mac laptops. Sono need to use a tablet in the house.
    But when we're walking down the street and making very quick stops,but we don't want to carry a 3-pound-or-so laptop, and we don't want totake up that much space at the cafe table, or just want more privacyin our computing experience, a tablet is ideal. However, we alsodon't want to carry a separate portable WiFi hotspot or connect topublic WiFi. That's why embedded cellular data is so critical for atleast some customers.
    AT&T's Glenn Lurie has pointed out that tablet consumers who haveembedded cellular connectivity are much more satisfied than WiFi-onlycustomers. I suspect that this is in turn a function of the fact thatthey use their devices more -- like me, when you're walking down thestreet.
  • 6. Protective cover: Speaking of always having the tablet in yourhand when you're walking down the street, Google/Asus should havelaunched it with a protective cover. The best model yet is the coverfor the original Apple iPad 1 in April 2010. No cover to date hasbeen able to match this one. Just copy it, ok?
  • 7. Software: The Asus Nexus 7 is the first device to ship withGoogle Android 4.1 Jelly Bean right out of the gate. I don't have thespace to review it here, but suffice it to say that it's a big stepforward for Android and that I find it a formidable competitor toeverything that Apple, Microsoft and others have to offer. If Googlecan just ensure that going forward, all implementations of Androidgets the latest OS innovations essentially immediately, it willimprove its competitiveness against Apple and Microsoft dramatically.
  • End Game

    What is the final verdict here? Some will argue that I am speakingwith a forked tongue.

    On the one hand, I'm saying that Apple does not have too much tofear from this 7-inch tablet that lacks dual cameras and cellular datamodem. And that is true. Apple offers a larger product that nailsthe feature set on essentially all fronts. But the price is alsosignificantly higher.

    On the other hand, the Nexus 7 tablet will take some sales awayfrom Apple on the margin. Some people simply had to buy the iPadbecause there was no decent competition. There is now.

    For Amazon,the situation is worse: The Nexus 7 is a direct competitor, exceptit's much, much better, for the same price.

    Ultimately, the Nexus 7 raises two questions that only Google cananswer at this point:

    1. Where is Motorola? Google owns Motorola now. Motorola makesGoogle tablets. For pete's sake, why did Google have to outsourcethis puppy to Asus? Is Google's own hardware operation so lacking incompetitiveness? As a shareholder, this is making me nervous.

    2. When will Google realize that the Nexus 7 -- and any other Googlehardware -- will only become a success once it matches Apple'sinvestment in retail stores? Hire somebody -- anybody -- and build500 of them pronto, or resign yourself to playing second fiddle toApple forever -- despite having superior products at cheaper prices.

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