If you have ever used a Factory image of the latest Android version/update on your Nexus device, you know the pain it comes with, First you need an unlocked bootloader, next it wipes all data on your smartphone.
Google understands you pain and will now provide OTA (over-the-air) images to install on your Nexus smartphones. So, you can just download the OTA update file on your smartphone or transfer to it, then boot into recovery and install it without worrying about losing any data or apps. But just as a precaution it wouldn't hurt to take a backup.
At present the OTA update files are available for the Nexus 5, Nexus 5X, Nexus 6, Nexus 6P, Nexus 7 (2013), Nexus 9, Nexus Player and Pixel C tablet.
This is available for just Nexus devices at present, and we have installed OTA updates earlier like this by getting OTA update file links from Google's servers but this is easier, since the links will be posted by Google officially for the public and we wouldn't have to dig into debug output of our phones to find URL's.
Source: Google
