Hands on with Google's $199 Nexus 7 tablet - CNN

SAN FRANCISCO (CNNMoney) -- Amazon, Microsoft and now Google have each unveiled a new response to the iPad within the last six months. That means that consumers now have a whole lot more to think about when deciding which tablet to buy.

Google's Nexus 7 tablet is the newest contender. Built by Asus, the Nexus 7 has much of what you'd expect from a high-end tablet: It features a beautiful, high-definition touchscreen, a zippy processor and a powerful graphics chip that makes video look stunning. It's lightweight but feels solid in the hand, and it's fairly easy to use.

Yet its low price -- $199, compared to $499 for the latest iPad -- pits the Nexus 7 squarely against the lower-end of the tablet market, particularly the Amazon (AMZN, Fortune 500) Kindle Fire. The Nexus 7's smallish, seven-inch screen -- plus Google's prominent placement of apps for videos, books, movies and magazines -- puts it head-to-head with the identically priced Fire.

If this were just a hardware battle, the Nexus 7 would win hands down. Its screen crams in about 28% more pixels per inch than the Kindle Fire. It has a front-facing camera (the Kindle has none), Bluetooth connectivity, a twice-as-fast processor and twice the memory. All that comes with the same battery life in a device that is two ounces lighter.

But picking a tablet isn't just about specs. Microsoft (MSFT, Fortune 500) proved that by unveiling its Surface tablet last week, whose most talked-about feature wasn't its speed or screen, but an innovative case that doubles as a keyboard.

So how does the Nexus 7 compare to its rivals in terms of usability?

Like the Kindle Fire, the Nexus 7 offers seamless access to digital content. The new "My Library" widget on the main home screen places all of your most-recently viewed books and videos in big, easy-to-navigate tiles. A tap on a tile will bring up the content right from where you left off.

The Nexus 7 features similar libraries of movies, books and magazines on its four other home screens. An Amazon-like "recommended content" feature practically begs you to buy new things from Google's Play store.

The problem with the Nexus 7 is that for all that beauty and simplicity, there's just not as much content to fill its screen as its competitors'.

Amazon and Apple (AAPL, Fortune 500) both have it beat in terms of movies and TV shows. Amazon's e-book store is second to none. Even Microsoft, with its Xbox Live integration, features the kind of compelling content partnerships with cable providers and media companies that Google hasn't been able to deliver on yet.

Apps and games also set other tablets apart, particularly the iPad.

Apple's tablet -- with 60% market share, according to IDC -- has more than 225,000 apps. When Microsoft enters the tablet market later this year, its store will feature many thousands of apps, and some versions of the Surface will allow users to download any of the millions of Windows programs out there.

Google doesn't say how many tablet-specific Android apps are in its store, but it's far, far fewer.

Android has just a 36% share of the tablet market, but even that makes Google's tablet effort sound more successful than it really is. Most of that market share comes from the Kindle Fire, which uses a highly customized version of the Android software -- and links to Amazon's app store, not Google's.

With few users and fewer apps, Google has a chicken-and-egg problem.

Hence the Nexus 7. It's powerful, sleek, well-designed and -- most notably -- it's cheap.

"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," says James McQuivey, an analyst at Forrester Research.

Google hopes that customers lured in by the hardware will adopt Google-powered services like its magazines app, Google Music, YouTube, and the Google Play content store.

"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 user's attention, rather than premium device dollars," McQuivey says.

It's elegant, it's easy to use, and it's hands down the best tablet in its sub-$200 class.

But that alone won't be enough to launch Google past Apple, or even Amazon, in the tablet space.