Can you really hurt a market when it is in as bad of shape as the android tablet market is? Prior to the nexus seven, nobody was buying android tablets because android tablets were pretty shitty. Maybe all the people making those shitty tablets deserved to be squeezed out of the market.

Google doesn't stand to lose much of anything. The other tablet manufacturers have released very few solid tablet products, and mostly at prices that put them at a disadvantage to the iPad. If Google can put out their own tablet with good build quality, decent specs, and reliable software updates for more than a month (I'm looking at you, every other Android device), then they're improving the image of the OS itself as well as giving consumers a better tablet to buy.

What do the other manufacturers have to offer to the ecosystem? A few things, like the Transformer Prime, have been genuinely innovative devices, but it seems like they mostly just dump their own UIs on top of old versions of Android and act like that differentiates their products.

This is what bothers me the most: why don't hardware manufacturers focus on what they are good at- making beautiful hardware? They put one leg in hardware and another leg in software and then wonder why they're stumbling

Well seeing as how there are only two decent Android tablets on the market (Transformer and Galaxy), I personally don't mind this one bit. Google gave the manufacturers a chance to create competitive tablets, and it just hasn't been happening (same could be said for the Android phones). The Android ecosystem is polluted with bad hardware combined with modified versions of Android that make Google look bad. Now Google has taken control and is releasing it's own hardware. Microsoft is doing the same. It seems like this is the only way to stay competitive with Apple.

The problem is with the pricing. As someone else mentioned, they wanted to take the fight to the Kindle Fire and hence started at $200. I get that.

However, I still think that Google could have taken control, and released it's own hardware (although the Nexus 7 is an Asus tablet first shown at CES ... mostly) with some profit($249 as the starting price) built into the equation, and still sold boatloads.

Where you say "vibrant ecosystem" I read "full of race-to-the-bottom crappy products diluting the Android brand value and driving developers iElsewhere."

They are raising the minimum quality/price ratio, and that's a good thing.

Selling the N7 at $200 could be a bulwark against Apple and Amazon's domination of the tablet market. At $250 it looks unfavorable vs the Kindle Fire. At $300 you start to think you should buy an iPad. But at $200 it's the same price as the Fire, but clearly nicer.

Hardware production prices will eventually fall and there could be a profit margin there for manufacturers if they stick to the $200 mark and don't lower it.

Lack of mind share among developers and consumers is a much bigger problem than margins when you are bootstrapping a network. Look at Sun while they were going and BlackBerry/Nokia now - on the products that they manage to sell their margins are not bad, but do they have critical mass? If Google does this right - then they have a shot at doing with Nexus to Apple what Microsoft did to Sony with the Xbox.

Agreed. Companies that were previously making Android tablets could probably make more money now building high margin accessories like cases and docks for the N7. To have done so much damage to the potential third party Android tablet market Google must have realized this was the make/break moment for Android tablets and really didn't have any other choice. It's still going to be a massive uphill battle against the 8" iPad over the holiday season.

I guess you mean the likes of Motorola and Samsung but there are dozens of Android tablets at or below the $100 mark. Many people call them "chinese tablets" as they are not status symbols but they sure do the job (or at least some of them do). So there is some leeway pricewise.

Somehow brings to mind the PC market before the white boxes took off.

I think the halo effect of Google's devices (and Jelly Bean) strengthens the market and opens it up for tablets with more features. I'd pay $150 more for a 7" with DLNA, sd card, and a rear camera (for scanning, goggles, and AR).