Print 33 comment(s) - last by rburnham.. on Mar 17 at 8:42 PM

Motorola's Xoom gets a lower price of entry

The 3G version of the Motorola Xoom is already in stores, but a cheaper, Wi-Fi-only version will soon be on the way. Motorola announced today that the Xoom Wi-Fi will officially be available on March 27 at a number of U.S. retailers including, Best Buy, Staples, and Walmart. 

Whereas the Xoom 3G (soon to be 4G) starts at a lofty $799 without contract ($599 with contract), the Xoom Wi-Fi will start at $599 with no strings attached. That price tag gets you a 10.1" tablet running Android 3.0, a 1280x800 screen resolution, dual-core processor and 32GB of storage space. That pricing also puts it in direct competition with Apple's 32GB iPad 2 (Wi-Fi-only model).

There is no word on whether Motorola will introduce an even cheaper 16GB Xoom at a later date to go head-to-head with Apple's 16GB iPad 2.

“MOTOROLA XOOM is a truly innovative tablet – its design, coupled with being the first tablet to have Android 3.0, results in a user experience that is one-of-a-kind,” said Dan Papalia, vice president of retail sales for Motorola Mobility. “We are now continuing to expand the choices available to consumers with the MOTOROLA XOOM Wi-Fi to be available soon from numerous leading retailers in the United States.”

Hopefully this cheaper variant of the Xoom will help to spur sales. Analysts are already reporting that Xoom sales are "underwhelming" compared to the overachieving iPad 2.

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RE: Still too high
By theapparition on 3/16/2011 12:49:41 PM , Rating: 2
Despite the fact that it has double the internal memory (1GB), double the external memory (32GB), higher res screen, more connectivity options, SD card support (future) and arguably a more funtional OS?

Sure, I'd like them all priced at $1.99 too. But Motorola can't sell them at a loss like others can. They have no other revenue stream to make up for that loss, unlike Apple, who takes a percentage of everyone's online purchases.

RE: Still too high
By invidious on 3/16/2011 1:10:37 PM , Rating: 1
There is no reason that Google couldnt subsidize the hardware costs by offering the manufacturers a piece of the app store revinue. This would allow the android tablet manufacturers the same luxury that Apple has.

RE: Still too high
By KoolAidMan1 on 3/16/2011 9:03:39 PM , Rating: 2
iTunes brings in only 10%. Apple makes money on the hardware, period. They get better margins margins combined with better hardware (check Anand's iPad 2 benchmarks) because they buy in significantly higher bulk than everyone else. They can make orders of 30 million IPS panels or 30 million SoCs or X amount of flash memory or whatever, because they know they will sell through it. They can also pay for components years in advance due to their stockpile of cash.

Volume discounting on this scale is an advantage that nobody else has at the moment. It either results in other companies settling on selling inferior hardware at the same price or higher than what Apple does, or biting into their profit margins. I don't think selling at a loss is acceptable for anyone. A colossus like Microsoft was in the red for nearly a decade with the XBox, and they were able to manage it because their software generates so much profit. That said, I don't know if they are willing to go through something like that again. A company like Motorola isn't capable of sinking cash into a product like that, so yeah, I don't think a loss leader like that is really an option.

"We’re Apple. We don’t wear suits. We don’t even own suits." -- Apple CEO Steve Jobs

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