The "Nexus 7" tablet, built by and co-branded with Taiwan's Asus, will begin selling for as low as $199 on the Google Play website and apps store from around mid-July. At 7 inches and $199, the device takes aim initially at the Kindle model, which analysts consider a window into Amazon.com's trove of online content.

Google can similarly use the Nexus 7 - unveiled at its annual developer conference in San Francisco - to connect to its own online offerings, which include video service YouTube and Google Play. It will go after more cost-conscious users who might shun the loftier price tag of $499 and above on Apple's iPad.

"That range of services will be the secret to stitching together this rag-tag fleet of Android gadgets into a platform that can compete with Apple for minutes of users' attention rather than premium device dollars," said Forrester analyst James McQuivey.

Shares in Google gained 0.8 percent to $569.37 in afternoon trade. The Nexus will feature the new 4.1 "Jelly Bean" version of Google's software, as well as a front-facing camera, a 1280x800 resolution screen, and an Nvidia Tegra 3 processor. Google's Android software is the No. 1 operating system for smartphones, but has struggled to compete with Apple's iPad in the market for tablets.

Source: Reuters