Google has just announced its Nexus 7 tablet and we have been among the lucky few to get a play with the latest piece of Nexus kit. The tablet was announced at Google I/O 2012 in San Francisco.

Priced at just £159 for the 8GB model, or £199 for 16GB, it is one of the cheapest and most powerful tablets available, or will be when it lands in mid-July. Manufactured by Asus, you'll be able to pre-order and buy the 8GB direct from Google Play, however Asus will sell the 16GB version through its own channels.

It also sports the latest version of Google's Android operating system, Android 4.1 Jelly Bean. So how does it handle?

The Nexus 7 is a very portable tablet. It weighs just 340g and measures 198.5 x 120 x 10.45mm. In the hand it feels solid and well built, something that tablets at this price don't always achieve. The size means it fits nicely into one hand, the tactile finish on the back giving plenty of grip. The design is understated, yet elegant. 

Controls-wise, the Nexus 7 is laid out like the Galaxy S III, with power button and volume controls on the right-hand side. The Micro-USB port and headphone jack are mounted on the bottom. On the bottom left-hand side is a set of pogo pins, just like the Galaxy Nexus, for charging and docking. Being an Android 4.1 device, control is via the touch controls on the display.  

There is no micro SD card slot, no replaceable battery and no HDMI out either. If you are wondering the micro USB socket is just for charging rather than being a display out (MHL) port at the same time. The move, say Asus, is to encourage people to stream content from Google's numerous Play content stores. Google Play is your storage drive now rather than anything local. That's not to say everything will be streamed, but its the idea that you'll download a movie to watch and then at the end delete if from your device if you need more space. 

With any tablet the display is critical. At 1280 x 800 pixel resolution it boasts a 216ppi pixel density which makes for sharp and crisp text and media. It's an IPS display, capable of vibrant and engaging colours with excellent viewing angles. Like other manufacturers, Asus has cut out the air gap between the touch surface and the physical display, again enhancing the performance. Of course, it's glossy and reflective and will attract fingerprints, but we found it easy to wipe clean, and the screen is much more impressive than the Kindle Fire. Asus here have taken the approach TV manufacturers adopted a long time ago and tried its best to remove the air gap between the screen layers and the glass. In practice that means less space for light to refract and therefore a more vivid experience. Understandably Asus call this technology TruVivid. 

Music playback, which integrates nicely into the newly designed Google Play store and home screen widgets, is of respectable quality from the rear-mounted speaker. The 1.3-megapixel camera on the front will suffice for video calling but don't expect to be getting high-quality snaps from the Nexus 7, because there is no rear camera. Interesting that means Asus and Google have removed the Camera app altogether. You'll only be able to use that front camera for video calling rather than snapping.  

In terms of software, Jelly Bean looks great and right now it seems as if the Nexus 7 is the best way to experience it. Project Butter certainly seems to have resulted in a device that's silky smooth. Navigating around the Nexus 7 is a real pleasure and apps and menus are quick to open. 

Features like Google Now looks like a really useful tweak to Google searching, making the search results feel more useful. In use and it seems as easy to use as you would expect. It's not just about blue links and green writing any more. 

If you want to find out more about what Jelly Bean has brought to the table why not check out our Android 4.1 Jelly Bean features round-up. 

From our two quick plays it looks like an impressive tablet from Google. The quad-core Tegra 3 processor with 12 core GPU is astounding on a device that costs £159, offering class-leading performance for Android. Just like the Kindle Fire in the US, this device could very well be the one that not only takes another bite out of Apple's rather large share of the tablet market pie, but totally destroys any chance cheap Android tablets have of making an impression. 

The shift to a smaller size is something we're enthusiastic about. While many tablets have come out around 10-inches, there is a lot to be said for the smaller device. It's easy to carry around, easy to use one-handed, yet big enough to experience media in a way that your smartphone currently won't quite do. It's a view shared by Asus who tell us that they hope people will own a Nexus 7 and a Transformer - one for the home and one for the road. 

The Nexus 7 tablet is on pre-order at the Google Play store, with plans to ship around mid July. 

UPDATE: After a second viewing with Asus we've added a lot more photos of the device in action and more comment above. Extra photos and words by Stuart Miles. 

Like the looks of the Nexus 7? Let us know in the comments below ...