Back in 2005 Google purchased Android Inc. and later came out with the Android distribution in 2007. Android was produced as an open-source operating system (OS) for mobile devices, which means that anyone can take the OS and build/rebuild it as long as they give the code back to the community.

Why is this important? Because of what Amazon later did.

Amazon knew that Google was onto something big, and as the numbers of Android adopters started to overtake Apple’s iOS, Amazon knew it had to act. Google had a growing marketplace of apps but at the time lacked a good marketplace for media (books, music, movies, etc). And this gave Amazon the “IN” that it needed.

So what did Amazon do? It completely re-engineered Android, essentially stripping out everything even noticeably Android, and created the Kindle Fire, a 7-inch media consumption device that was priced perfectly for mass adoption with app and media purchases going directly to Amazon.

Kindle Fire image courtesy of Wonderlane

This, of course, conflicted with Google’s ideal situation in that everything should be purchased through its “Play” stores.

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So how do you compete?

Simply come out with your own tablet.

The Nexus 7 is Google’s answer to the Kindle Fire. Recently announced at the Google I/O conference, the Nexus 7 is ready to take the midsize market by storm. Google is competitively pricing these at $199 for an 8 GB version and $249 for a 16 GB version. Because this will be a media consumption monster, we would caution anyone going for the 8 GB (some games and movies could eat gigabyte alone). The HD sizes are just OK, but the rest of the device really drops some jaws with how much Google gives you for the price.

It comes with a Tegra 3 quad-core processor, 1 GB of RAM, a 4325mAH battery (approximately eight hours of active use), and even a front-facing camera. So it has plenty power to get you through any media you throw at it. Along with that you also have common features such as Wi-Fi 802.11 b/g/n, Bluetooth, micro-USB, microphone, NFC (Android Beam), accelerometer, GPS, magnetometer and a gyroscope. All this coupled with the fact that the hardware is built by ASUS, which has shown amazing ability at producing sexy and sleek devices with stunning build quality, ensuring that it will be a head turner.

Nexus image courtesy of blogeee.net

But the best part isn’t just the hardware, but the software as well. Being that it carries the “Nexus” title means that it comes with Google’s gold-stamped unsoiled version of Android. Android has had some bad press for “fragmentation,” which we have to solely blame the hardware manufactures and carriers for, as they all feel the need to change the Android OS to fit their own purposes. Not so with Nexus devices, which receive Google’s OS updates almost immediately after announced. This will apply to Nexus 7, as it will be coming out with Google’s newest OS version, “Jelly Bean.”

Jelly Bean is only a minor step upgrade (going from 4.0 to 4.1), but don’t let that fool you; there are some hefty improvements taking place. Most exciting of which is the “Project Butter” in which Google revamped the OS with considerable speed increases. With Jelly Bean’s Project Butter, the Tegra 3 processor and Google’s own optimization for the hardware, the demos have shown this to be one of the smoothest devices ever.

Amazon definitely found a sweet spot in the market with 7-inch tablets, being that full-size tablets are hard to carry everywhere and phones are too small to read comfortably for long periods. Now Google has definitely taken that and raised the competitive bar with this move. It will be interesting to see what the competition will do to catch up.

Amazon has already stated that it is working on a follow-up Kindle Fire 2. There is even a substantial amount of rumors flying around that Apple wants to get into the 7-inch tablet game as well. With all these heavy hitters in the arena (even Microsoft finally climbing back into the ring with its “Surface”), we have a lot of exciting competition ahead, which means better products and prices for us the consumers.

The Nexus 7 is currently taking preorders and is stated to release soon (most expect the end of July).

There is one thing that we know for sure with all of this: This coming Christmas everyone should make sure they have 7-inch stockings hung.