When Microsoft announced Surface, its first own-brand PC, it raised immediate questions about the implications for the company’s hardware partners.

Not long after, and Google has also announced a tablet, the Nexus 7.

It looks a neat device. 7″ 1280×800 display, Corning-toughened glass, NFC, accelerometer, GPS, gyroscope, wi-fi, Bluetooth, and a Quad-core NVIDIA Tegra 3 processor. Plus you get Google’s latest “Jelly Bean” operating system.

By coincidence, I have just been reviewing another Android tablet, from a brand you likely have not heard of: the Gemini JoyTAB 8″ running “Ice Cream Sandwich”.

I did not get on well with the JoyTAB. It is full of the compromises you expect from a device made down to a price with little attention to design.

But the price. I thought the JoyTAB was at least good value at £149.00. What chance does it have against a Nexus 7 for just £10 more – and with £15 of Play Store credit thrown in?

The Nexus 7 is made by Asus so you can argue that at least one OEM vendor is not losing out here. Even so, competing with this thing will not be easy. 

We do not yet know the price of the Surface, either in Windows RT or Intel guise. My prediction is that Microsoft will aim to price it more like an Apple iPad than a Nexus. Although Microsoft is desperate for Windows 8 tablets to succeed, it also makes its money selling the software, Windows and Office, that is included in Surface. It cannot afford to price it too low.

By contrast, Google makes little money from software. Android is free. Google makes money from advertising, and also hopes to build its profit from the content market, where it takes a cut of every sale. If NFC payment takes off, it might even profit from every payment you make with an Android device.

I am right behind Microsoft in what it is doing with Surface. It has been let down by its OEM partners, with too much hastily designed and/or low quality hardware, further impaired by unwanted bundled software and poor customizations. Surface follows on from Microsoft Signature in challenging those partners to up their game. Long term, they will benefit from Microsoft’s efforts to improve Windows devices overall.

How Android tablet vendors will benefit from Nexus is less clear.