Google Reportedly Prepping Android-Based iPad Challenger

Eric E. Schmidt, chief executive of Google, told friends at a recent party in Los Angeles about the new device, which would exclusively run the Android operating system. People with direct knowledge of the project -- who did not want to be named because they said they were unauthorized to speak publicly about the device -- said the company had been experimenting in "stealth mode" with a few publishers to explore delivery of books, magazines and other content on a tablet.

After reportedly holding back to see what Apple would do with the iPad, competitors such as HP and others have been hard at work developing their own answers to Apple's challenge.

The rivalry between Apple and Google has become increasingly personal as the two companies have begun to compete in a growing number of areas. Google's Android operating system has been a fast-growing alternative to the iPhone in the smartphone market, with Apple signaling that it is taking the threat seriously by filing a patent infringement lawsuit against handset maker HTC in what has been seen as an indirect assault on Google's smartphone offerings.

While an unsurprising development given Google's and Apple's increasing overlap, a Google tablet would offer yet another area of direct competition between the two companies and likely escalate tensions even further.