Motorola Xoom $800 Price May Spell Failure - InformationWeek

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Commentary
2/7/2011
10:39 AM
Eric Zeman
Eric Zeman
Commentary
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Motorola Xoom $800 Price May Spell Failure

If the Android 3.0 Honeycomb tablet debuts $300 above the iPad base price, it may not be able to compete with Apple or the Samsung Galaxy tab.

Over the weekend, tech blog Engadget caught sight of a Best Buy circular ad that contained pricing and availability details for the Motorola Xoom. According to Best Buy, the Android 3.0 Honeycomb tablet will hit the streets on Feb. 24 with a price tag of $799.

The timing of the launch by Best Buy falls in line with what Motorola's CEO has said about the Xoom's availability. The $799 price point also falls in line with pricing for the Xoom seen in Verizon Wireless's internal system. That's $300 more than the base price of the iPad. Can the Xoom survive at that price point?

Like it or not, Apple set the pricing standard for tablet computers when it launched the iPad a year ago. The least expensive iPad can be purchased for $499 (though higher-end models stretch up to $829). Samsung and its partners in the U.S. priced the Galaxy Tab at $400 to $650, depending on which carrier and whether or not it was purchased with a contract. While the Tab's specs don't match the Xoom's, Samsung kept pricing fairly close to that of the iPad. (Samsung says the Tab has sold well, though exact sales figures aren't known.) U.S. carriers have, however, begun discounting the Tab heavily. T-Mobile, for example, is selling it for $250 with a contract.

The Best Buy advertisement does not specify if the $799 price point is subsidized by Verizon Wireless or not. That could spell the difference Motorola needs to move this product. Verizon Wireless would need to be willing to cover at least $200 or $300 -- bringing the sale price to consumers down to $500 or $600 -- to make the Xoom a more palatable purchase. Verizon routinely subsidizes smartphones and netbooks by that much. If the $799 price is full retail cost and Verizon doesn't offer subsidization, the Xoom may die on the shelf. If the $799 price is the subsidized price, then Motorola and Verizon may have a bit of a problem.

The Motorola is an appealing product, no doubt. It has a 10.1-inch display, which is larger than the iPad's by a smidge. It has a widescreen touch display with 1200 x 800 pixels, and is powered by dual-core 1GHz processors. It will ship with a 3G radio for wireless broadband, but can be upgraded to 4G Long Term Evolution through a hardware modem swap later this year. (Motorola said this requires a technician.)

Other hardware specs include support for 1080p HD video playback and Adobe's Flash Player. For gaming, it has a gyroscope, accelerometer, e-compass and a barometer. The main camera shoots at 5 megapixels and can capture 720p HD video. The Xoom has a user-facing 2 megapixel camera for video chats.

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