Industry sources told DigiTimes that ASUS and Google are working on a 7" co-branded tablet that may be released as early as May. The device is expected to target Amazon's Kindle Fire and should be priced at $199 - $249.
Google sought Taiwan-based co-brand partners at the end of 2011, the sources noted. Among potential partners, HTC had strong design capability but insisted on directing development of the co-brand model and was unwilling to develop a low-price model to impair its brand image, while Acer did not have in-house R&D capability, the sources indicated. Google finally selected Asustek because of its ODM capability and good product quality, the sources claimed.
Asustek's motivation for cooperating with Google is to win Google's confidence to facilitate development of its Android-based devices, learn Google's technology to develop software and content, as well as enter the tablet US market, the sources indicated.