It's not the iPad Google is trying to kill with the Nexus 7, it's the Kindle Fire.
Like the Kindle Fire, the Nexus 7 is priced at $199, has a 7-inch display, and, perhaps more importantly, is focused on content consumption. But can it put out Amazon's Fire?
At first blush, I'd say so. The 7-inch, 1280 x 800 IPS screen is crisper and brighter than the one on the Fire. On top of that it is more comfortable to hold; the rubberized back is easy to grip and the curved edges make it more comfortable than the Fire's squared-off ones. It also feels a bit lighter in one hand. And yes, like the Fire, you can even fit it into your back pocket.
The tablet also feels faster than Amazon's, which makes sense since it has a faster quad-core Tegra 3 processor and 1GB of RAM. The Fire, in comparison, has a dual-core processor and 512MB of RAM. Scrolling on the tablet is very smooth and watching a YouTube video over WiFi was extremely fluid. Both tablets lack rear cameras, though the Nexus 7 has a front-facing camera for video chatting.
It's not really a specification or hardware war between the two, though: it's a software and media content feud.
Jelly Bean - the nickname for the new Android 4.1 operating system - sails along on the tablet and the new notification tray and Chrome browser are very nice additions. But Google made a big push at the announcement today about its Google Play store and how the device was built for reading magazines, watching TV or video, and playing games. I can attest that videos on the screen look great and magazines, like Men's Fitness, are visually appealing. But Google simply doesn't provide the same selection as Amazon; I came up empty handed when looking for US Weekly and People Magazine. (Don't judge me on my magazine choices.)
The same goes for TV shows. No "Glee." No "Gossip Girl." (Both are available on the Kindle Fire.) Of course, you can download Amazon's Kindle app or music app for the Nexus from the Google Play App store, but there isn't a movie or video option.
And apps is the last place the two compete. While Google has a fully stocked Google Play store with lots of apps, many of them haven't been optimized for larger screens. ( Flipboard told me a couple of weeks ago it didn't see a major market demand yet for Android tablets and was waiting to see if it should develop and Android tablet app.)
Google's own Currents app is exactly the type of app there should be more of for Android tablets, but it's one of the few examples of nice apps for Android tablets. While phone apps look fine on the 7-inch screen, the app experience cannot compare to what you get on the iPad. Apple's tablet continues to provide the best tablet apps; they've been designed with the larger screen in mind and have nicer interfaces.
But, as I said, the Nexus 7 isn't trying to kill the iPad, it's after the Fire. And for now, I'd give your $199 to Google if you're not committed to Amazon.