Can Google's (Nasdaq: GOOG) Nexus Dethrone the Apple iPad?

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When Google Inc. (Nasdaq: GOOG) launched its new line of Nexus tablets a couple weeks ago, it was a shot across the bow of Apple Inc.'s (Nasdaq: AAPL) dominant iPad.

Even though Hurricane Sandy forced Google to cancelan event planned to show off the new gadgets, it went ahead and launched its new products anyway.

The timing was no coincidence.

Google's latest salvo came less than a week after Apple introduced a smaller, less expensive iPad Mini with a 7.9-inch display to compete against the Nexus 7 tablet.

It's no wonder these guys are at war. Tablet sales are expected to hit $29.1 billion this year, according to the Consumer Electronics Association.

That number is $10 billion higher than projected in January, escalating the battle to a whole new level.

Clearly both companies are feeling the heat.

And even though Apple is the clear leader in market share, Google has rolled out cheaper devices that are attracting many users-especially price-conscious ones.

The question is: Do Google's Android-powered devices have enough firepower to crack Apple's grip on the tablet market?

It's still too early to tell, but there's good reason to believe the Internet search giant may just pull it off.

Here's a look at what the new tablets have under the hood.

Nexus Cheaper & Better?

Apple's 9.7-inch iPad has been the unquestioned king of tablets since it was launched two years ago.

But Apple, Google, Amazon.com Inc. (Nasdaq: AMZN) and now even Microsoft Corp. (Nasdaq: MSFT) are brawling over buyers in the fast-growing tablet market.

With the introduction of Google's larger tablet, Apple's smaller, cheaper tablet and Microsoft's Surface, the competition is likely to get even more heated.

Google's entries include the latest in its line of successful Nexus 7 tablets and a larger 10 inch version to compete with the full sized iPad.

The larger Nexus 10 is being made by Samsung Electronics Ltd. (PINK: SSNLF) and features a display screen that measures 10 inches diagonally, a little larger than Apple's 9.7 inch iPad.

What's more, the Nexus 10's display may be superior to the iPad's.

"The new Google device may have the best screen we have ever seen on a tablet. To put in context just how good…it has the same resolution as Apple's new 13-inch MacBook Pro with Retina technology," The Los Angeles Times reported.

What's more, the new device is lighter and thinner than the iPad and has a higher resolution camera.

But here's the kicker.

The Nexus 10 tablet with 16 gigabytes of storage will sell for $399. That's $100 less than the comparable version of the latest iPad.

Google is also upping the ante by widening the price difference between the iPad Mini and the Nexus 7 by lowering the price from $249 to $199.

And Amazon's Kindle Fire, which also uses the Android operating system, starts at $159 for a no-frills model.

Some analysts have questioned whether consumers will balk at the iPad Mini's $329 price.

"How much is Apple's superiority in software and content worth to you?" wrote Bloomberg's Rich Jaroslovsky.

Bottom line: Google's Nexus and Amazon's Kindle could start to attract buyers who can't afford an iPad or simply don't want to pay that much.

For GOOG, Content is the Key

If Google can sell enough Android-based tablets, it could threaten Apple's lead in the all-important competition to attract application developers and new content.

"That suddenly makes Android a more attractive platform for app developers. The iPad is the most popular [because] Apple controls the operating system so developers don't need to rewrite an app for each device," Robert Hof wrote in Forbes.

"All it takes is a hit product using the latest version of Android that sells in the millions to create that single standard that would help make Android apps a must for developers."

Google Stock Chart
(Nasdaq: GOOG)


Google's Android operating system has already established its dominance in the global cell phone market.

Android-based smartphones outsell Apple iPhones by almost two-to-one with a 68.1% share, according to research firm IDC.

And that's likely to continue with Google's latest line of smartphones, also introduced last week.

But until now, the tablet market has been an Apple stronghold.

Nevertheless, there's evidence Android is making inroads.

Android-powered tablets will capture 40% of global tablet sales this year, up from 30% last year, according to Gartner Inc. Apple's market share is expected to drop to 58% this year from 66% last year.

With Android, it seems that Google may have the right ammunition to win the tablet war.
"Apple will remain dominant in terms of worldwide vendor unit shipments," Tom Mainelli, research director at IDC told DataComm+.

"However, the sheer number of vendors shipping low-priced, Android-based tablets means that Google's OS will overtake Apple's…worldwide market share by 2015."

So you can expect iPad models to continue to sell well during the coming holiday season.

But Google (Nasdaq: GOOG), Amazon and perhaps even Microsoft, are poised to take a big bite out of Apple in the long term.

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