The tablet is a modest success, and it appears Google will stick with Nexus.
From ArsTechnica:
Successor to Google's Nexus 7 may bump display up to 1080p
The next Nexus 7 may increase the resolution of its display to 1080p and maintain the relationship between Asus and Google, according to a report from Digitimes. The follow-up has been rumored for some time, but now Digitimes suggests Google will tweak the device with updates while maintaining the starting $199 price.
Google scarcely promoted the Nexus 7’s IPS display, which was an impressive 7-inch 1280×800 and rivaled the screen of the Kindle Fire HD. If Google preserves the aspect ratio of the Nexus 7 in its follow-up, the new display would be 1728×1080; if it conforms to a standard HD display, 1920×1080. Digitimes also suggests Google and Asus may slim down the bezel surrounding the screen, which might allow an aspect ratio change.
Successor to Google's Nexus 7 may bump display up to 1080p