Source: http://gizmodo.com/5890483/will-the-nexus-tablet-come-from-asus
The story goes like this. At CES this year Asus announced a 7-inch, $250 tablet that was powered by Nvidia's quad-core Tegra 3 processor. Supposedly Google was so impressed that they approached Asus and were like, "Hey, wanna build one for 50 bucks cheaper and then slap our name on it?" and Asus was all like, "Sure bro. That sounds tight!" Or something like that.
It would make sense on some levels. Clearly Asus is already almost there in terms of price-point and features Google was looking for, and Android and Me speculates that to get it down to $199 they would just shave off some of the built-in storage and instead have an SD card slot for users to provide their own. Amazon's Kindle Fire has almost certainly been the best-selling Android tablet to date, but because it uses Amazon's version of the software Google isn't getting any of that mobile ad money. They want to fix that, and a $200 quad-core tablet with Google's full ecosystem would certainly tempt a lot of people.
At the same time, you've got to wonder why would Google buy Motorola Mobility if they weren't going to use them for making Nexus devices. Seems like a good fit, no? They built the OG Droid, and the Xoom, which debuted Android 2.0 (Eclair) and 3.0 (Honeycomb), respectively. But then again, the Xoom was a pretty major flop, so maybe it would make sense for them to go to Asus after all. The Asus Transformer series has been very well received. The rumor also speculated that there could be a ten-inch version for $300, but I've already exceeded my recommended daily allowance of sodium. [Android and Me via Unwired View]