Google is reportedly working with Asus on a Nexus 7 version tablet that could eventually go as low as $99, reveals a report from Taipei-based Digitimes. Citing unnamed industry sources, the report said that the low priced tablets will be released as early as the first quarter of 2013. Sources reveal that the search engine has asked China-based touch screen maker O-Film Tech to enter the tablet's panel supply chain to provide glass-film-film (GFF) technology.

"The sources said O-Film reportedly started shipping products for the Nexus 7 in December 2012. GFF technology will help cut production costs for the lower-priced Nexus 7 as well as make it thinner", the report said.

Though the cost-reduction measures could eventually produce a $99 Nexus 7, this may not happen initially. The cheaper Nexus 7 may first be priced in the $129 to $149 range, the report said. It is speculated that the shipment estimates for the new Nexus 7 are in the range of 500,000 to 600,000 in the first quarter. "However, market observers suspect that Google and Asustek may not be able to release such a low priced tablet in 2013 due to limits as to how far the companies can drive down costs in their supply chain," according to the report.

A CNET story observed that the $99 tablet will bring in a competitive pricing against the $329 iPad Mini. "Needless to say, a Nexus 7 priced below $150 and eventually going to $99 would make Google's tablet  even more competitively priced against the $329  iPad Mini - even allowing for the high-quality build that Apple typically achieves with its tablets," the report said. According to recent statements from Asus executives, Google and Asus are currently shipping about one million Nexus 7 devices per month.

Meanwhile, folks at The Digital Reader dug out a Picasa image whose EXIF data shows an unreleased device, that the report claims could be the $99 Nexus 7.