Google Inc (NASDAQ:GOOG) is well respected for its giant share in the search business. The company is also the designer owner of the Android O.S., a platform that dominates the smartphone industry. However, Google’s venture into the tablet industry, in which Apple Inc. (NASDAQ:AAPL)’s iPads are a dominant force, has not been an easy ride. Google introduced its first tablet, the Nexus 7 this year, a device produced in collaboration with hardware manufacturer ASUS. The tablet is significantly priced at a discount compared to Apple’s iPads, but, Inc. (NASDAQ:AMZN)’s Kindle Fire and Kindle Fire HD tablets are still challenging price-wise.

google nexus 7

Google went on to plan for another Nexus tablet, the Nexus 10, initially scheduled for launch early 2013. However, following Apple Inc. (NASDAQ:AAPL)’s launch of iPad Mini, tentatively meant to rival the Nexus 7 and other low end tablets, Google announced the launch of its Nexus 10 produced in collaboration with Samsung Electronics Co., Ltd. (LON:BC94) Analysts are of the opinion that the Nexus 10 launched in October might have been a desperate reaction to Apple’s launch of iPad mini along with a new fourth generation iPad. Apple Inc. (NASDAQ:AAPL) could have had all the market with only, Inc. (NASDAQ:AMZN)’s Kindle as a notable rival, during the holiday season.

In a report published Monday, Pacific Crest analysts Evan Wilson and Bryan Liang set a 12-month price target of $795 for Google, with an Outperform rating. However, the analysts lowered their revenue estimates, despite raising their EPS, based on slowdown on sales units for the Nexus tablets, and increased margin. The analysts opined that there is a likelihood that the new Nexus 10 is a re-branded Samsung tablet. They noted that they still believe Google Inc (NASDAQ:GOOG) to be working on a Nexus 10 tablet to be launched early next year, as predicted before.

In the report, the analysts wrote, “we are bullish on Google Inc (NASDAQ:GOOG), but still have not seen the device that makes us bullish on its Nexus hardware. We are lowering our Nexus revenue estimates, but raising our EPS estimates, as margins should improve from less hardware in the mix”.

The analysts lowered their 2012 estimates for Google Nexus 7 sell through units from five million to four million, with three million expected to be sold through Google Play. This is due to slower-than-expected demand, a later launch of a low-priced $99 or $129 SKU, and conversations with supply-chain partners.

The analysts earmarked that Google’s primary goal with Nexus, is to drive innovation on Android relative to competition. The analysts noted, “while the Nexus 7 and 10 devices are attractive in terms of features and price relative to other Android tablets, we still are not confident they will take meaningful market share. We are lowering our revenue estimates due to slower sales of Nexus products. However, we are raising our EPS estimates as margins should benefit”.

At the time of this writing, Google Inc (NASDAQ:GOOG) stock was trading at $673.15 per share, up $11.99, or a 1.81 percent increase form yesterday’s close.