Take this as a rumor, but Google may be on the verge of launching a Kindle Fire competitor, that should come with the latest version of Android whenever it's launched - JellyBean. Whether that will be Android 5.0 or just 4.1 or 4.2, it remains to be seen.
"Google executive chairman Eric Schmidt has recently revealed that the company plans to launch a high quality tablet PC within the next six months, but since he did not provide any further detail about the device, it has left many players to believe that Google will copy its strategy from Nexus smartphone to help expanding Android tablet PC's market share."
This strategy is certainly smart, and I wish Google pushed it much earlier. Well, the Nexus tablet strategy is very important, too, because it allows them to show how a tablet should be made and for what price it should be sold. But I believe that the strategy to sell inexpensive Android tablets is even more important.
If Google would've went with this at least 6 months ago, they would've sold many millions by now. They should've realized this since the beginning, before the HP firesale. It became pretty obvious with the HP tablet that people want a tablet that is good enough, as long as it's also cheap enough. And they are willing to disregard the iPad for it.
In fact the iPad is already rumored to have been affected by the Kindle Fire and lose 2 million potential sales. This goes to show that Google could've easily taken more market share from the iPad, if only they released some cheap tablets early on. Google needs to push many units into the market as soon as possible, before the iPad gets too entrenched and before Windows 8 arrives. It's the only way to remain relevant in the tablet market, and attacking the iPad on price is a very good way to do it.
Android tablets also suffer from a severe lack of tablet optimized applications right now, and selling many millions of units would certainly help with convincing developers they need to take Android tablets more seriously. Apps are still very important even for tablets, and Google needs to get a lot closer to iPad in that regard if they want their tablets to be taken seriously in the market, even with a cheaper price. Still, a cheaper price should go a long way, just like it did for the already millions of units of Kindle Fires and over a million HP tablets.