China Times reports that Google is producing its own self-branded touchscreen-equipped Nexus Chromebook for a possible 1Q13 release.

Unnamed sources report that Google placed the Nexus orders with Compal and Wintek rather than with a 3rd-party manufacturer as seen with previous Chromebook releases (Asus, Samsung, etc). The internal components will begin shipping to Compal and Wintek this month who will build the unannounced Nexus device (Google doesn't have the facilities), a sign that Google's Nexus Chromebook could go into production before the ball drops on New Year's Eve.

A Chromebook is a netbook/laptop that uses Google's Chrome OS. What makes it unique is that it's reliant on the internet, offering tablet-like storage capacities and pushing most of the data storage into Google's cloud. This feature may be the platform's biggest setback given that consumers are still accustomed to locally-stored files and applications.

One example of a Chomebook would be the 12.1-inch Samsung XE500C21-H04US, costing around $380. Serving as one of the pricier models, it comes packed with an Intel Atom N570 processor, 2 GB of DDR3 memory, a 16 GB mSATA SSD, an Intel GMA 3150 GPU, and a built-in 1.3MP HD webcam. It also has two USB 2.0 ports and 802.11 a/b/g/n connectivity.

With a Nexus Chromebook going into production at Compal and Wintek by the end of the year, there's a possibility that the device will make its debut at CES 2013 in January followed by a full-blown retail release in 1Q13. The Chromebook will benefit from optical lamination which merges the touch sensor and cover glass into one unit, thus reducing the thickness of the display.

That said, will this touch-based capability jack up the price of Google's Nexus Chromebook, or will the search engine giant eat the costs in the name of pushing the platform out to the buying consumer? As it stands now, Chromebooks sold on the market currently start at $199, making the bottom-of-the-line model cheaper than a Nexus 7 tablet.

What the new Chromebook needs is a hinge that allows the screen to fold back, creating a tablet-like form factor and a cheaper competitor to Microsoft's Surface RT tablet. Regardless, its arrival in 1Q13 seems ideal given that Windows 8-based hardware is pricier, Apple's own 7-inch tablet starts at $329, and consumers recovering from holiday spending may be looking for something portable and not so expensive.