Rumors of a Google tablet , when DigiTimes first wrote that the Mountain View, Calif. company was planning a 7-inch tablet for $200. Google plans to sell the device through an online tablet store beside competing models in order to give the tablet the distribution it needs for success.

At $249 Google feels the tablet is too expensive though, . That is $50 higher than the Kindle Fire, which at $199 is selling . The Fire is one of the devices Google sees as a competitor, so pricing at or below $199 is a key goal.

What gets the axe? The GooglePad is said to have a Tegra 3 quad-core processor, a 7-inch screen, and is Wi-Fi only. Google may be forced to ditch the Tegra 3 and settle for a dual-core processor--fairly standard in today's tablets. It may cut corners in design or screen quality--no one outside Google really knows.

Google's move seems to suggest that Apple will soon also need to take a hard look at the future of the iPad. At $499, the iPad is quickly becoming isolated at the high-end of the market, while competitors increasingly make a play for the more budget-conscious segments.