Things may be heating up a bit more in the 7-inch tablet game. DigiTimes is reporting that Google has started working on what is called the Nexus Tablet, a 7-inch tablet that will feature Android 4.0 and be priced right at $199. This price mark is the same as the Amazon Kindle Fire and most recently what RIM had dropped the BlackBerry PlayBook to.

Google’s Nexus tablet is said to be manufactured in Taiwan. Although, Google Taiwan claim they never heard the company planned its own tablet. However, Google executive chairman Eric Schmidt recently let it slip that the company plans to launch a high quality tablet PC within the next six months, but offered up no additional details.

The 7-inch tablet market space seems to be a growing trend. It has even been rumored that Apple may launch an iPad 3 in a 7-inch variant. Nonetheless, the BlackBerry PlayBook may begin getting some stiff competition in 2012. Do you think RIM should pursue alternatively sized tablets? The rumored 10-inch PlayBook was supposed to be cancelled. More recent rumors suggest there is another PlayBook, codenamed Black Forest, but it is unknown as to its size.

via BI