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New Android tablets put even more pressure on failing tablet

While Google Inc. (GOOG) has a credible record when it comes to mobile operating systems -- having made the booming Android operating system -- its track record when it comes to flagship hardware is decidedly more mixed.  

Every major OS release Google designates a "flagship" hardware model.  For example Android "Eclair" 2.1 was fronted by the Nexus One.  For Android "Honeycomb" 3.0 -- Google's new tablet-specific Android distribution -- that flagship model was the Xoom.

The Xoom has been billed in the media as a promising, but unpolished product.

Set at a lofty price of $599, it has failed to compete not only with thinner, lighter iPad 2 from Apple, Inc. (AAPL), but also cheaper Android tablets.  Yet another sales analysis has landed and the picture sure isn't pretty.

The Nexus One wasn’t a sales blockbuster, and according to some estimates, the Motorola Xoom may be doing even worse.

Global Equities analyst Trip Chowdry claims that Motorola (MMI) is sitting on an enormous overstock of Xooms.  According to his estimates, the company produced between 500,000 to 800,000 units, but has only sold between 5 to 15 percent of them.

That estimate means that the best-case scenario is that the Xoom has moved an anemic 120,000 units in the two months since its release.  And the worst-case scenario is simply crushing -- that only 25,000 Xooms have been sold.

And it may only get worse.  South Korea's LG Electronics is preparing to release its G-Slate tablet, priced at $529 USD.  And in June two new Galaxy Tab models from Samsung Electronics (005930) land at under $469 and $499.  And that's not to mention Dell's Streak refresh and other coming products.

Even more troubling for Motorola is the fact that ASUS today launched its Eee Pad Transformer Honeycomb tablet that is priced at $400 for a 16GB Wi-Fi model and $500 for a 32GB Wi-Fi model.

In short the outlook for Xoom isn’t very promising.  The fact that analysts once estimated that the device would sell 3 to 5 million units makes its sales even more embarrassing.

The tablet is boldly venturing into waters of commercial disappointment seldom sailed before.  Its flop may only look graceful in light of the ultra low bar that Microsoft's infamous Kin project set for a mobile failure.  But that's not saying much. 

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Why I believe the Xoom is failing
By Lanister on 4/26/2011 11:07:28 AM , Rating: 2
I have a Xoom and I love it. The only reason I bought it was I had enough gift cards to BestBuy to get one; I would not have spent my own money with the price that high.

So I believe the reasons are:
1. Price is too high, should be $400 - $500. The fact that the transformer is flying off the shelves shows there is demand; Moto just priced themselves out of the market.
2. The product while has promise isn’t done, it feels like it is in final RC stage.
3. Two key selling points 4G and SD card are not working, hackers have got the SD card working but for some reason Google hasn't.
4. Marketing and product placement. Walk into any BestBuy and you will find a nice stand with 2 Ipad2's out front for all to see and play, where is the Xoom? It’s typically placed somewhere in the netbook area with no special display. I have read reports of it being in the far back of the store and some cases of it not being displayed at all.

By tekzor on 4/26/2011 12:52:27 PM , Rating: 2
4. is so funny because its true ( and sad)

you described the exact set up my BB has.
2 ipad 2s in the middle open area while the xoom is to the corner where the netbooks are. Talk about poor marketing!
And lets not forget the playbook. In the cell phone section and my BB did even have it hooked up to the wifi so I can use the tablet to its potential.

By mcnabney on 4/26/2011 12:55:46 PM , Rating: 2
The Apple display is required by Best Buy's contract with Apple. The Xoom's placement is assigned by Best Buy Mobile, which operates relatively independently inside of most Best Buy stores. Best Buy placed it with their laptops and netbooks. It has a nice mount that allows the user total freedom to pick it up and fiddle with it.

RE: Why I believe the Xoom is failing
By lonechicken on 4/26/2011 2:42:27 PM , Rating: 2
4) Yep.

I understand there is a special deal that BB made with Apple, but does the deal include "...make sure the Xoom and the Iconia A500 have totally drained batteries so nobody can try them out"? Because it seems that way.

By Cheesew1z69 on 4/27/2011 8:30:27 AM , Rating: 2
My BB opened the Acer box for me so I could check out the device, they had none out! :O I was like, I am not going to buy something I haven't even SEEN, he had to get manager approval, and he was kind of perplexed it wasn't out on display =\

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