With Wednesday’s launch of its Nexus 7 tablet, Google gives the current tablet market a much-needed jolt of energy.

The Nexus 7 is the tablet that Google should have launched with a year ago. The Nexus 7 packs a high-performance, no-compromise set of features at attractive prices–$199 for the 8GB model and $249 for the 16GB model.

This winning–on paper–combo will immediately put the Nexus at center stage. It also will make all current Android tablet makers reevaluate their own offerings on the market. but selling a tablet directly to consumers online, with no clear changes to the app ecosystem behind it, won’t be enough for Google to gain market share at Apple’s expense.

Google Nexus 7Manufactured by Asus, the Nexus 7 tablet represents the first commercial manifestation of Nvidia’s Project Kai. Nvidia designed the Kai reference platform to provide manufacturers with a shortcut blueprint of how to create a competitive tablet at consumer-friendly pricing.

At CES 2012, when Nvidia and Asus announced plans to produce a Tegra 3 tablet for $250, the two companies clearly had the Amazon Kindle fire in their sights.

Amazon Kindle FireThe Kindle fire, which shipped last fall, is the best-selling Android tablet thanks in large part to its low price of $199. but the Kindle fire takes a lot of heat for its mediocre 1024-by-600-pixel display, its forked Android operating system, its limited specs (no camera, little onboard storage, no expansion), and its slow performance. Sales numbers for the Kindle fire have dropped off since the initial burst of enthusiasm from consumers; but no other Android tablet has made a significant impact, either.

Google’s move into the tablet arena with its own branded Nexus tablet is significant for several reasons. first, it shows that the company recognizes how important it is for an OS maker to be deeply involved in creating hardware that complements its own software.

For evidence, look no further than the mess of compromises and mediocrity we’ve seen from Android tablets over the past year, including poor choices in weight, processors, display, and design.

In today’s Apple-dominated, post-PC age, a tablet with hardware designed independently of its operating system is unlikely to emerge as an impressive flagship device. And certainly that approach isn’t the way to generate the Apple-level frenzy that every tablet maker yearns for.

Microsoft Surface tabletThat’s why Microsoft jumped into the PC hardware fray for the first time in 37 years, with last week’s introduction of the Microsoft Surface tablet.

[Read: "Microsoft Hardware: Successes and Failures"]

And it’s why Google is expanding on what it already offers with its Nexus phone line by now offering its own tablet. The company should have taken this step last year when it launched Android 3.0 Honeycomb, the first operating system designed specifically for tablets, instead of crossing its fingers and hoping for the best with the spectacularly unimpressive Motorola Xoom tablet.

To what extent the Nexus 7 embodies Google’s vision of a tablet is unclear. One area where Google may have influenced its design is in the tablet’s inclusion of near-field communication capability. but beyond that, the core specs for the Nexus 7 are the ones that Nvidia and Asus talked about as far back as CES.

Back then, Asus went so far as to introduce the Asus Eee Pad MeMo 370T with specs, price, and a time frame for availability that are quite similar to the Nexus 7′s. Since CES, however, Asus has said nothing more about its MeMo plans. Now we know why.

Clearly, all parties recognized that for the Android tablet OS to succeed, something had to change. And the reality of Kai should have a significant impact on current tablet makers.

How can Toshiba’s Excite 7.7 tablet, priced at $550 and carrying a 1280-by-800-pixel display, compete with Google’s Nexus 7 when the latter offers the same screen resolution and costs $300 less? The Toshiba does have a 0.7-inch larger screen, but both have 16GB of memory and both run on an Nvidia Tegra 3 processor.

Meanwhile, Amazon is rumored to be prepping its coming Kindle fire replacement for a midsummer launch. whether Amazon will step up its game with that tablet remains to be seen; but based on today’s news, we believe that the company will need to have a competitive answer to remain firmly in the mix.

Here’s a chart that compares the specs of the Google Nexus 7 to five other tablets:

So far, Google hasn’t indicated that it will sell the tablet anywhere except at its Google Play online store. Consequently, consumers who want to do their own hands-on comparison of the Nexus 7 with other tablets will be out of luck.

Google’s approach with the Nexus 7 addresses a relatively small subset of the problems facing the Android tablet market. among the other issues to be resolved in the bigger picture are better-resolution displays and improved, lighter designs.

Perhaps most significantly, Google’s conference has as yet lacked any discussion of the OS- and device-fragmentation issues that plague developers. I routinely hear these issues cited as the number-one reason that developers choose to make an iPad app instead of an Android app; and the tiny market share that Android tablets have thus far achieved has done nothing to convince developers to fully embrace the Android tablet ecosystem.

Google played up the fact that the company now lists some 600,000 apps in the Play store; but it didn’t say how many of those apps are optimized for and work well on a tablet.

Google Android 4.1 (Jelly Bean)The app ecosystem, unfortunately, still remains a sticking point for Android tablets–and a key factor that makes it harder to recommend an Android tablet to consumers eager for the next great, cool app.

The bottom line is Android still has a long way to go to surpass Apple’s iPad. but when we look back, the delivery of the Nexus 7, with Android 4.1 Jelly Bean, may mark a turning point in the Great Tablet Wars.

Google Nexus 7 Could Heavily Impact Tablet Wars