Google Inc. on Wednesday took the wraps off its own tablet called the Nexus 7, in an anticipated move that points to growing competition particularly with Apple Inc.
In the latest flare-up of the pricing war in the fast-growing tablet market, Google said Nexus 7 will be available for $199, comparable to Amazon.com Inc.'s (AMZN)
The product was introduced at the search giant's developer conference in San Francisco. Google said it would begin taking orders on the device now, with shipping expected to start in mid-July. The device will launch first in the United States, Australia, Canada and the United Kingdom.
Shares of Google gained 0.8% to close at $569.30, while Nvidia saw its stock jump 3.2% to close at $13.14. Amazon's shares traded flat closing at $225.62.
Google also rolled out the latest version of its Android operating system, code-named Jelly Bean, and announced at the event that there are now 400 million devices using Android, adding that 1 million devices using the operating system are activated every day.
Jelly Bean features voice search, offline voice typing and Google Now, which gives users real-time information related to traffic conditions, keeps track of one's favorite sports team or figures out the best route and departure time to make a specific appointment.
What's more, Google introduced a ball-shaped computing device called the Nexus Q, designed for the home to stream entertainment content from the company's Google Play digital store. The Q device will cost $299 and begin shipping sometime next month.
BGC Partners analyst Colin Gillis noted Google tablet's pricing as a key element in squaring up against Apple.
"It's a great start," Gillis wrote in emailed comments. "Price is right. Consumers win. At the fringe, having respectable tablet solutions for under $200 is going to hurt Apple over time."
Evercore Partners analyst Patrick Wang, who covers the chip industry, said the announcement also was an "incremental positive" for Nvidia. With the Nexus 7 shipping next month, it "has a better shot at widespread distribution given Google's backing," he wrote in an email.
However, Wang pointed out that Google "doesn't have a good hardware track record."
"It's yet another Android tablet, albeit much cheaper -- a market that's really been unproven with the exception of the Kindle Fire," he added. "At a $199 price point, it could be tough to drive high-margin Tegra sales."
Google co-founder and Chief Executive Larry Page was not able to attend the conference due to problems with his voice. But co-founder Sergey Brin made a surprise appearance at the gathering to help demonstrate a new wearable computer technology that users can put on like eyeglasses.
Brin kicked off the demo by featuring footage from sky divers over San Francisco, followed by a crew rappelling down the face of the conference building and then riding bikes onto the main stage in San Francisco.Read more about Google's Project Glass stunt.