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The idea of a barebones Nexus tablet has been around for a while. Rumors have put it at anywhere between $150 and $250, most likely $199.
Wall Street Journal is selling this as a move by Google to compete against the iPad. But a $200 Nexus tab is more likely to compete against the likes of Kindle Fire and Nook Tablet.
Currently, WSJ is expecting Samsung and Asus to be Google's initial partners. The tablets will have branding from both Google and the manufacturer. Eventually, the soon-to-be-acquired-by-Google Motorola will presumably join these ranks.
For reference, a few years back, Google tried selling the Nexus One phone directly to consumers through a website. Despite being a solid device, consumers were put off by the $530 price tag without contract. The fact that people weren't able to try out these devices before buying them may have also contributed to poor sales figures.
These tablets are likely to be subsidized by Google. Much like Amazon and Barnes & Noble do today, Google can choose to make little or no money on these tablets but make up for that in advertising revenue and sales of books, music, movies, and apps through their new media ecosystem, the Google Play.