Google chairman Eric Schmidt started a firestorm when he was quoted saying the company planned to “market a tablet of the highest quality.” Since then, speculation surrounding a Google-branded slate has nearly spiraled out of control. DisplaySearch analyst Richard Shim recently fueled the fire, suggesting that a Nexus-branded tablet will enter production in April for an initial run of between 1.5 million and 2 million units. Further reports also suggested that the Mountain View-based company had reached out to ASUS to design the Google-branded slate based on its Eee Pad MeMo tablet. Now, a new rumor suggests that ASUS has scrapped its $249 MeMo to focus solely on the “Nexus tablet.” Read on for more.

While earlier reports indicated that the device would retail between $199 and $249, Android and Me on Friday claimed that the new target price is lower — between $149 and $199. The blog can only confirm the tablet’s 7-inch display, however, which its supply chain source said is “a done deal.” With a lower entry price, Google may be looking to undercut Amazon’s Kindle Fire and use a cheaper dual-core CPU than the previously rumored quad-core Tegra 3, which has also reportedly been scrapped. Google’s Nexus tablet is expected to be announced at this year’s CTIA Wireless trade show in New Orleans, which takes place from May 8th to May 10th.

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