Google’s Nexus 7 tablet is pretty awesome. It’s awesome enough to be eating into a market long held by Apple and Amazon. The sophisticated hardware combined with the low price of $199 make it an appealing choice for those who prefer the openness of Android versus the walled gardens of the iPad and Kindle Fire. The Nexus 7 does face its biggest threat this year, however, with the rumored launch of the cheaper, and smaller, iPad Mini.

According to reports from DigiTimes, Google is not taking the launch of the iPad Mini lightly. The iPad Mini is rumored to cost about $300, but it would still eat into the market of the cheaper Nexus 7. How do you compete with a name like Apple? Offer an even cheaper tablet.

Industry sources are saying that Google and Asustek are working on two Nexus 7 tablets to be announced and released before the end of the year. One of the tablets will cost the usual $199, but the other will be priced at a far more competitive $99. Both models are reportedly thinner and use TN panels for the display.

As for other specs, we’re still in the dark. We can gather that the $99 tablet would be more of an entry level tablet for those who don’t require the latest cutting edge technology. The $199 tablet would most likely be an upgrade to the already existing Nexus 7 tablet. The Kindle Fire HD has proven to be more powerful than the Nexus 7, and Google is no doubt looking to compete on the same level.

Like always, it’s important to take all of this with a truckload of salt. Asustek has denied the reports, but that’s par for the course in the tech industry. DigiTimes and their sources called the launch of the original Nexus 7 so it’s not beyond the realm of possibility. Besides, a $99 tablet from Google would absolutely destroy the competition this holiday season.