If someone had told us a year and a half ago that 7-inch tablets would challenge the popularity of 10-inchers, we would have had no trouble in calling that someone out of his frigging mind. However, the unexpected has happened, and, mostly due to Amazon’s and Google’s fine efforts, 7-inchers are starting to feel more like the norm than the exception.

But while the Kindle Fire’s and Nexus 7’s solid builds and more than decent spec sheets have certainly helped this market shift, we have to be honest all the way and admit the price lowering has been key here.

Amazon has thrown the first punch with the $200 Kindle Fire. Google and Asus have responded with a power punch $200 Nexus 7, while Amazon has refused to throw in the towel, counterpunching with another $200 tablet, the Kindle Fire HD, but also with a $159 tablet.

The fight seemed to go the distance once we heard Apple planned to introduce an iPad Mini, but now, ladies and gents, it seems we’re heading to a Google-Asus win by technical knockout. The two partners are already preparing to welcome the second generation Nexus 7, which will consist of two different tabs.

The first one, priced at $199, is expected to be a thinner and more evolved version of the first gen Nexus 7, while the second lower-end model will cost just $99. The info is far from official, coming via Digitimes, who is citing, as usual, unnamed “industry sources”.

Asus has already denied Digitimes’ claims, which might crush our dreams and hopes, but then again we have to ask ourselves why did the Taiwanese respond to the report so promptly. It’s not like anyone would have taken Digitimes’ “intel” for granted, based on the website’s track record, so why bother with a refutal? Unless there is some truth there, but Asus and Google don’t want people to know about it just yet.

If a $99 tablet were to be in fact prepared in follow-up to the Nexus 7, we have to wonder how on Earth would Asus and Google keep the costs so low to hope to make some kind of profit. We know that the first Nexus tab has a $152 BOM (bill of materials), so it’s obvious that major sacrifices are to be expected in the processor, display, memory and connectivity areas. But even with all these, is a $99 competitive tablet really doable?

We don’t have the answer to that just yet, but if Digitimes is right, we will find out by the end of the year. What do you guys think? Could Asus and Google pull it off? And if they could, will it be game over for anyone else involved in the 7-inch tablet war?