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.