Google will team up with Asus to launch a 7-inch tablet over the next few days that could have the same impact on the tablet market as the Eee PC did when it triggered the netbook revolution several years ago.

According to anonymous industry sources cited by Digitimes, this is going to force vendors like Acer, Lenovo and Samsung Electronics to cut their prices and could diminish gross margins for Taiwanese supply chain makers.

Oddly enough, Google's decision to launch a cheap tablet arises from the forthcoming launch of the new Amazon Kindle Fire (rather than the Apple iPad), one is should cost between $199 and $299 and go on sale in the third quarter of the year.

The price decrease is likely to affect all Android tablet manufacturers and force some either to exit the market completely (like HP did) or look for even lower bill of materials (by using MIPS-based hardware for example).

Either way, this will start a scramble for survival much to the amusement of Apple we reckon. Currently the cheapest large screen Android tablet on the market in the UK with a capacitive touchscreen display is the Disgo 8100 Slim which costs just under £100 (around $160).

Source : Digitimes