Google opened fire on iPad and Kindle Fire with a Nexus tablet designed to showcase the latest Android software and be a window into its online shop for films, music and more.
The Nexus 7 tablet computer will be priced at less than half the cost of the market-leading iPad and broadens Google's arsenal in its battle against Apple, Amazon.com, and Microsoft to be at the heart of Internet Age lifestyles.
The seven-inch tablet powered by the latest generation of Android software is being made for Google by Taiwan-based Asus and weighs about as much as a paperback book, according to Android team head Hugo Barra.
"We wanted to design a best-of Google experience optimized around the content available at Google Play," Barra said during a presentation opening the Internet titan's annual developers conference in San Francisco.
Nexus tablets were available for order in Australia, Canada, Britain, and the United States at the Google Play store at a price of $199 and would begin shipping in mid-July, Barra said. That is the same price as Amazon's Kindle Fire.
The tablets come with a $25 coupon for Google Play content -- Google's answer to Amazon and Apple's iTunes stores for books, music, magazines and other content.
"It has always been a goal of the Nexus program to provide you with the best-of Google experience the way Google envisions it," Barra said.
Google also introduced an Android-powered Nexus Q device for wirelessly streaming films or music from Google Play to televisions or speakers.
Along with the new hardware, Google said it is beefing up its Google Play store to offer more entertainment.
"Google Play is your digital entertainment destination, with more than 600,000 apps and games plus music, movies and books," a Google blog post said.
"It's entirely cloud-based, which means all of your content is always available across all of your devices."
In addition to movie rentals, Google will be offering films for sale. The California-based Internet powerhouse boasted partnerships with major studios such as Disney, Paramount and Sony.
"You can watch as much as you like. You can also purchase episodes of your favorite TV shows," the California tech giant said.
Google Play will also be adding digital magazines from Hearst, Conde Nast and other publishers.
The company described Nexus 7 as "a powerful new tablet" which "makes everything, including games, extremely fast."
It weighs 340 grams (12 ounces) and has a front-facing camera.
Android platform developer Chris Yerga said Nexus 7 is also "a serious gaming device."
Google at the same time said it was releasing a new version of its Android software for mobile devices, called "Jelly Bean," which "builds on top of Ice Cream Sandwich," the current iteration of Android.
"It makes everything smoother, faster and more fluid," the Google blog said.
"The keyboard is smarter and more accurate, and can predict your next word. And voice typing is faster, working even when you don't have a data connection."
While Android has leapt to the top of the mobile phone market, Apple remains dominant in tablets, holding around 62 percent of the market to 36 percent for Android, according to research firm IDC.
The news from Google comes just a week after Microsoft took on Apple with a plan to release its own branded tablet called Surface later this year.
"Learning a lesson from Amazon, Google can see that the only way to beat the premium-worthy iPad is to go for the millions of customers who are ready for smaller and cheaper tablets," said Forrester analyst James McQuivey.
After hooking fans with a low-price Android tablet, Google could then direct their loyalty to higher-end devices powered by the operating system and build the ranks of customers at Google Play, the analyst reasoned.
"That range of services will be the secret to stitching together this rag-tag fleet of Android gadgets into a platform that can compete with Apple for minutes of users' attention rather than premium device dollars," McQuivey said.
The number of Android devices being used has quadrupled since this time last year to 400 million, with a million new smartphones or tablets powered by the Google-backed software being activated daily, according to Google.
"We are not slowing down," Barra said of Android's growth.
Jelly Bean software improvements included a keyboard that "learns" as it is used and eventually starts predicting words before they are typed. The program has beefed up abilities to convert speech to text or into search queries.
A Google Now feature lets people combine search history, calendar and other information to allow devices to predict needs such as a fast route to work in the morning or a nearby coffee shop.
Google will begin rolling out the Jelly Bean in an update to newer model Android devices in July.