(Updated: 10:22AM, PST: Google has announced the Nexus7 at their I/O conference. Details to follow.) A new report claims that Google and partner Asus will be “taking direct aim” at Apple’s iPad this week with the unveiling of a $199 tablet at the Google I/O conference.

Two people with knowledge of the matter have told Bloomberg that the co-branded tablet will be announced at the developer conference, which kicks off on Wednesday. One source said the device will show off the next generation of Google’s Android operating system, code-named Jellybean.
Rumors were floating earlier this year but a Google/Asus 7-inch tablet. The Wall Street Journal reported last week that Google would release a tablet in “coming weeks.”
If the rumors are true, the tablet could represent the fulfillment of Google chairman Eric Schmidt’s promise last December that the company would deliver a tablet “of the highest quality” within six-months time.
The tablet market could come down to a three way fight between Apple, Google, and Microsoft. Microsoft announced last week that it would release its own Windows powered tablets later this year.
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