"The hardware is only part of the recipe, so Google better be coming up with exciting news for developers so that the number of dedicated tablet apps grows and grows fast," Milanesi said. "Apps, an intuitive user interface and sleek hardware make a winner. Android so far has had very limited apps, and okay user interface and some good hardware."

Ken Dulaney, an analyst at Gartner, noted that Android tablets didn't do well competing with the iPad mainly "because many people thought the software was more difficult to use than on the iPad."

Dulaney said that part of the problem with Android software was a familiar one for the tablet OS: a lack of upgrades. "Many Android tablets were using 3.0 and there were no upgrades or [the] new Ice Cream Sandwich-version, Android 4.0 tablets to be found."

The Nexus 7 will reportedly run Jelly Bean, the next generation of Android that may be version 4.1. More will be known at Google I/O, which opens on Wednesday in San Francisco.

With Microsoft coming into the market with Surface -- and continued speculation about a mini-iPad from Apple -- the market could suddenly become much more crowded. If that happens, tablet-optimized applications could become a major differentiator. "This is the time when the three big players -- Microsoft, Google and Apple -- have to stake their claim for the future.... It had better be good, with lots of tablet-optimized applications."