Report: New Nexus 7 tablet due in July. Here’s what to expect.

Watch for an updated Google Nexus 7 tablet as early as July, sources tell Reuters on Wednesday. Aside from a higher-resolution display, the refreshed 7-inch Android slate should also have a chip inside from Qualcomm instead of Nvidia. Pricing could change, say Reuters sources, but the focus will be on keeping the cost low in an effort to ship up to 8 million units in the second half of 2013.

nexus-7-unboxed With Google’s I/O developer conference scheduled for mid-May, I don’t think we’ll have to wait too long to see if this report pans out. And I suspect it well. The cycle of hardware technology improvements for mobile devices is running around 12 to 15 months and the original Nexus 7 debuted in June of last year. The current model has already seen a very minor refresh with a boost of internal storage at no additional cost: the original $ 199 model went from 8 GB of memory to 16 GB and Google later added a 32 GB model with integrated mobile broadband for $ 299, for example.

It’s likely that Google will hold the $ 199 price point for the lowest new Nexus 7 model and drop the current model pricing by $ 50 until the older units are sold out. As for what to expect in a refreshed Nexus 7? Here are my thoughts, which are mostly minor improvements:

The same 7-inch screen size, but a higher-resolution panel of 1920 x 1080 for a pixel density of 315 pixels per inch (ppi). The current device uses a 1280 x 800 resolution display at 216 ppi.
It’s possible that Google keeps an improved 1280 x 800 model at $ 199 and offers the higher-resolution panel as a more expensive option; say $ 249.
Google opts for Qualcomm’s new quad-core Snapdragon 600 chipset. The company often switches hardware components between manufacturing partners on Nexus devices, but if this happens, it’s certainly not good for Nvidia and its Tegra 4 chip.
With a Qualcomm chip inside, it’s highly likely the Nexus 7 gets an LTE option due to the chipmaker’s solid modem integration on its silicon.
The new Nexus 7 will get a memory boost: 2 GB of RAM up from the current 1 GB.
A rear camera is added but it won’t be a top-of-the-line sensor: Just good enough for Google+ photos and such.
The refreshed tablet will ship with at least Android 4.2 software and a later version to quickly follow via software update; that software will be what Google announces at its developer event.
I expect the current metal pins to be in the same place on a new tablet model; this would keep the new device compatible with the Nexus 7 dock which only arrived on the market recently.

As Reuters correctly notes, this is a low- or zero-margin strategy for Google. The company isn’t looking to earn a high profit margin on the hardware. Instead, it wants to get as many Android devices out in the wild so it can collect data and earn money through targeted ads and services. An improved Nexus 7 tablet at current pricing would help do just that.