Google introduced their first Nexus branded tablet, the Nexus 7, at Google I/O, the Google developer conference. The tablet is being sold in the US market through the Google Play store along with the GSM version of the Galaxy Nexus and the Nexus Q. Google also rolled out tablet accessories like cases and extra chargers.
Is this an iPad killer? Hardly. This is an Amazon Kindle Fire killer, and it's priced starting at the same $200 mark as the Kindle. While the Kindle fire is an adequate tablet with lackluster specs, the Nexus 7 comes in the same size with fully featured hardware and all the Google apps that Amazon chose to leave off. You can even use a Nexus 7 to read your Kindle books.
The Kindle Fire was sold as a loss leader, meaning that it cost more for Amazon to make the things than what they made from selling them. Amazon did this intentionally to create dependency on the Amazon Market. Google could very well be doing exactly the same thing with the Nexus 7. In this case, they want to create dependency on the Google Play store and their efforts to expand sales of books, magazines, movies, and music. Unfortunately, Google has not been quite as successful in negotiating licensing contracts for some of this content, so Amazon still has an edge in availability. That's ok, you can still play your Amazon content on the Nexus.
There's also some risk in this strategy, since other tablet makers, like Samsung, already have 7 inch tablets on the market. The Galaxy Tab is currently priced higher than the Nexus 7 and offers fewer hardware features.
If you wanted a Kindle Fire but were hesitating, now you've got a reason to get something else. Amazon will undoubtedly launch an updated version of their tablet this year, but they'll have a hard time matching the exact specs of the Nexus 7. That was the whole point. Google has grown a lot since their first attempt at direct to customer sales. They list a phone number for support and customer service. They've tied sales of devices to sales of music, movies and apps to make it an ecosystem. They're probably going to sell a lot of these things.
If you decide to order, be aware that Google charges shipping fees and sales tax in most states. As of this writing, there's a two to three week wait for shipment.