The Nexus 7 and the iPad 7

[gallery]The Nexus 7I just got my hands on a Google Nexus 7 and wanted to share my thoughts on it right away. The unboxing was a pleasant experience. Apple has definitely taught the entire industry a thing or two in making simple and cool packages for their products. The Nexus 7 booted up pretty fast and I was pleasantly surprised to be greeted with my gmail id which I used to purchase the product. Amazon's Kindle experience has obviously taught the industry a good lesson in this area.The sign-on process was very simple and snappy. Pretty quickly I was ready to go with the Nexus 7. The hardware itself is pretty sleek for a $199 device. The rubberized back with texture is pleasant and the screen is sharp. The recessed power button and volume control were responsive. As most reviews have pointed out, the entire experience out of the box is customized towards media consumption. Instead of the traditional 4 buttons on the front Android screen, you now have 6 of them pointing to different Google properties of interest- Google Services aggregator, Google Books, Google Magazines, Google Play Movies, Google Play Music and Google Play store. With this device, Google's transition from a Search company to a media and products based company is complete. Search and Advertising are and will continue to be Google's bread and butter for years to come but with this tablet, Google is definitely going after the casual media consumer audience. Between this, Google TV and Nexus Q, Google's aim for the living room is obvious.Android Jelly Bean 4.1 seemed fast in my limited time with it. There is almost no lag to speak of (I found ICS to be the first Android release that was best-in-class caliber and ready to compete with iOS). Google Now was very interesting and the concept of cards was unique. I will give this feature a more thorough shakedown in the coming days and share my thoughts here.Overall, the Nexus 7 looks like Android's best representative on the tablet front. It is simple, polished and a sophisticated experience. One that can be mentioned in the same breath as the iPad.The 7 inchersLast Fall when Amazon debuted its Kindle Fire, it was well received by folks looking to get a tablet that satisfied their media consumption at a cost much less than the $499 it took to  buy an iPad. The Kindle Fire filled a niche that no one thought existed. In the process, it also showed the world that differentiation (in this case, by price and an integrated Amazon experience) was how one went up against the behemoth that was the iPad, and survived to tell the tale.Google has taken the Kindle Fire mantra and added its own touch to it by giving it the latest and greatest Android OS (Jelly Bean), a media centric experience (with Google Play) and a price that is extremely compelling ($199). As my early impressions indicate, I think that Google has a big winner in its hands. One that immediately makes it a competitor in the space and gives Apple another competitor to worry about in the tablet space. Which brings me to the final part of the post. The iPad Mini.The iPad Mini/ iPad 7Rumors are strife about Apple preparing to launch a 7 inch version of the iPad, dubbed the iPad Mini. Speculation is that this would be a competitor device to the Kindle Fire and the Nexus 7 and one that would be sold at a price that would convince more people to buy it. It would be that iPad you get for your kid while you and your wife use your own. Pricing is rumored to be anywhere between $199 and $299. Given its remarkable pricing power with its suppliers, Apple could very well price it at $199 and make a profit. But that would completely cannibalize not just their iPad market but also sales of their soon to be refreshed iPod touch. To keep their premium moniker, Apple would probably price the iPad Mini at $249 or $299. This would sit between the $199 iPod Touch and the $399 iPad 2. Apple would then have a touch device at $149 (iPod Nano), $199 (iPod Touch/ iPhone), $249/$299 (iPod Mini/ iPhone), $399 (iPad 2), and $499 (iPad).Steve Jobs once famously said that 7 inch tablets were too small for users to experience the full gamut of a tablet touch experience. The actual quote goes, "Apple’s user testing had revealed that there are clear limits of how close you can physically place elements on a touchscreen before users cannot reliably tap, flick, or pinch them,”. But that was then and this is now. Jobs is no longer alive and Tim Cook knows that if they continue to ignore the 7 inch market, they would soon start seeing an impact on iPad sales. At this point, the Kindle Fire and Nexus 7 have not made a significant dent in iPad's market. But thats a matter of time. And with marketshare comes developer support. And that to Apple is the big thing.One of the biggest sore points about the Android experience on tablets has been the lack of tablet specific apps. With the success of the Nexus 7, that will change. Apple would not want any change to the status quo in its utter domination of the tablet industry. The iPad Mini would ensure that potential buyers of the Kindle Fire and Nexus 7 would think twice and then settle on yet another Apple product. The only risk it runs is cannibalizing its iPad sales. If the iPad Mini starts taking volume away from its 10 inch big brother, Apple's profits will suffer. Apple makes about 40% margin on the iPad. An unheard of number in the business. It would not be able to make anywhere close to that with a $249 or a $299 iPad Mini without serious component compromises- something Apple is not known to do. Its gross margin will take a hit at the cost of maintaining market share in the segment. How this plays out in the long term remains to be seen.In the short term though, Apple needs a iPad 7 to counter Google's Nexus 7.  The tablet business is definitely hitting its stride now and as consumers, its a win for us.