The Google Nexus 7 by Asus redefined the general approach that a 7″ tablet could not be as good as a conventional 10 inch one. Amazon’s Kindle Fire HD further added to the popularity of 7-inch slates, and today, given the booming sales, augmented further by Google’s announcement of the Nexus 7 32GB, and the Nexus 7 3G, Android based 7-inchers are expected to capture at least 70% of the the tablet market, excluding the iPad. And according to Taiwan-based supply chain makers, The remaining 30% is expected to be shared by the 10-inch Android tablets, and Microsoft’s new Windows 8/RT products.

It is also expected that there could be a significant drop in demand for Android based 10-inch tablets, given the inclination to go for a 7-inch tablet, as well as the introduction of Microsoft products into the 10-inch space. Future 10-inch offerings will either have to offer something unique and solid in terms of features, like the Nexus 10, or would have to be priced a lot more competitively to survive.

The Chinese market, which forms one of the largest consumer base for high-tech products, is seeing biggies such as Lenovo, Asus and Samsung engaged in cut-throat competition against local players who are able to offer similar offerings at extremely competitive pricing. Top manufacturers, however, are still planning to cash in on the 7-inch boom and launch tablets in the CNY1000 ($160) price range, to able to successfully compete with the local boys.

Asustek, they guys who gave us the Nexus 7, are said to be working on a new 7-inch model for launch  in Q1-2013. Asus would be eager to replicate its success with the Nexus 7, with this new product for China, and surge ahead towards its goal of 10 million tablets in 2013.