Sometimes rumors are more than just rumors. Having spent a long time in this business, there have been plenty of instances where a little "leaked" information has gone a long way. Letting a few details slip and then refusing to talk about the product itself is an awesome way to generate hype. It's good business to keep people interested in your product while scaring the competitors in the process.
Rumor of a $99 Nexus 7 tablet isn't surprising. Google wants to command the Android tablet market, and what better way to do that than to undercut Amazon and other 7-inch tablet makers. It's quite possible Asus and Google have gone back to the drawing board to fix the current design issues with the Nexus 7, and will relaunch a refreshed version.
But the rumor specifically states that this $99 version will be entry level – what this means is unclear – and that it will be accompanied by a more robust, upgraded version for $199. Both will be thinner than the original, and sport TN panels made by Taiwan-based panel maker HannStar Display. Both are expected to hit the market before the end of the year.
Sources claim these tablets are to help build Google's 7-inch arsenal to better compete with Apple's 7-inch iPad Mini. But there's more than just that: Amazon just launched the 7-inch and 8.9-inch Kindle Fire HD tablets. Barnes & Noble also just announced the 7-inch Nook HD and the 9-inch Nook HD+. So far we really don't know what Apple plans to release, but it's frightening the 7-inch tablet market to the point that competitors are gearing up for war.
Based on the Amazon and B&N patterns, it would seem likely that Google would want to launch a 9-inch Nexus 9 tablet by the end of the year for around $199 (16 GB), and revise the current Nexus 7 and sell it for $99 (8 GB). At least this plan would put Google on equal ground with Amazon and Barnes & Noble. Even more, we already know additional Nexus tablets are in the works from tablet makers other than Asus – the Nexus 7 was just the beginning.
Currently Asus is denying rumors of launching a $99 Nexus 7 tablet – that's common practice. We're betting a 9-inch model will be released by another manufacturer (Samsung?), and that the current model will be revised and sold at the cheaper price point towards the end of the year. That's speculation, of course, but we smell a little hint of truth in this rumor.