New supply chain rumor says that Google and Asus will release a co-branded low-cost tablet in May.
Google is supposed to directly compete with the Amazon Kindle Fire as early as May according to Digitimes. Google and Asus are supposed to release a co-branded 7-inch Android Tablet that supports the Google Play Store.
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Apple just increased the pressure on high-end Android Tablets with the $100 price-cut on the iPad 2. The low-end 7-inch segment is currently the best performing Android tablet category. Amazon has a head start with the Kindle Fire and a complete content infrastructure. Google needs to catch up quite a bit.