Google's Second-Gen Nexus 7 May Be Limited To 3.5 Million Units (GOOG)

Google (NASDAQ: GOOG) was expected ship as many as eight million units of the second-generation Nexus 7 in 2013.

A new report by DigiTimes indicated that may not be the case.

According to the Taiwan-based supply chain publication, global shipments are estimated to come in at 3.5 million units -- less than half of the original estimate. It is also half the number of units that the original Nexus 7 sold in one year.

The unusually low number is being blamed on the device's limited reach. Unlike the iPad and its miniature counterpart, the new Nexus 7 will reportedly skip out on the Chinese market.

Google's lower-than-expected shipments are also being blamed on the increasing number of low-cost seven-inch tablets.

Related: Google Play Downloads Top Apple's App Store By 10%

When the first Nexus 7 arrived last year, Google's biggest threat was Amazon (NASDAQ: AMZN). Microsoft (NASDAQ: MSFT) posed a threat as well, but Surface's 10-inch display and $500 MSRP put it in an entirely separate class. The same could be said for the third-generation iPad, especially after sales of that unit began to decline.

Today, the Nexus 7 faces competition from Apple's (NASDAQ: AAPL) current iPad Mini and its anticipated successor, Hewlett-Packard's (NYSE: HPQ) Slate 7 and a rising number of cheap clones.

GigaOM recently wrote about a little-known $149 tablet, the Hisense Sero 7 Pro, that is supposedly just as good as the original Nexus 7. Available at Wal-Mart (NYSE: WMT), the Sero 7 Pro includes the following specs:

• NVIDIA (NASDAQ: NVDA) Tegra 3 quad-core processor
• Android 4.2 Jelly Bean
• Seven-inch, 1280 x 800 IPS display
• 1GB of RAM
• 8GB of on-board memory
• 2.0MP front camera
• 5.0MP rear camera with flash and auto-focus
• Mini HDMI, SD, and USB ports
• 10-hour battery life

Those specs are a bit lower than the next-generation Nexus 7, but Hisense's device is also $80 cheaper.

In addition to these devices, Google will also face competition from a number of tablets that are expected to ship this fall.

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ