So, Xoom is really 800 dollars for 3G verison.

[petvas]

The Xoom needs a lower entry point if Motorola wants any success. 800$ is a lot of money. People can buy an iPad for 499$.
Another problem is that there is no WiFi only model. Why have to pay for a contract or data subscription? Motorola should know better. If they want any success they should a) drop the price or create a lower spec model and b) create a WiFi model.

Apple has nothing to worry if Xoom is really priced at 800$ and if it needs a data plan.

 

[Highcroft]

I'm starting to believe that that ad is fake or is at least worded wrong. I don't believe service is required necessarily to activate wifi. The Galaxy Tab on Verizon had something similar but it was $399 with at least one month required at purchase. Even that could easily be bypassed by just convincing the person at Best Buy not to add the data plan. In the end, it equals to pretty much the same thing but different wording might have caused less of an outcry.

I really want a quality Android tablet but not at that price. I'm hoping that the Asus Transformer can meet their target price of $400 or else I'm just going wait for the iPad 2.

 

[ufkdo]

I don't get the point of giving just a tablet $800. While you can buy a macbook air 11 inch with $1000, I don't think any tablet, especially the ones which cannot be used with your own wifi, worth $800, sorry.

In my opinion, tablets should be "netbook killer". So they should be cheaper, at least they should have some cheaper models.

 

[racer1441]

Motorola - chuck full of fail.

Saw their ad last night and knew right away that it was going to be a train wreck.

I bet they sale 50,000 units at most.

 

[SSpiro]

Umm, if you don't care about 3G, it's $200 more. If you can manage your data, or only require 16gigs of storage, it's $300 more.

I don't know why they didn't do like Apple did and release at multiple price points. I guess they think Apple doesn't know what they are doing.

Agreed 100%.

I'm in the market for something, and i'd much rather have the Xoom vs. the ipad, however with that price point and zero need for 3G/4G on the device, Moto eliminated me from their demographic.

 

[vrDrew]

I have a strong suspicion that many in the Android community are waking up to the realization that making an "iPad killer" isn't quite as easy as they thought.

Motorola, as a company, is no slouch. They've got top class engineers, tons of manufacturing experience, and well developed partnerships among supppliers. But at the end of the day, they've found out that making a device thats capable of running Honeycomb doesn't come cheap.

More than anything, I think the Xoom shows how absolutely perfectly Apple got the balance of price/performance right on the iPad.

If you are selling a tablet, if you make it too simple and barebones, you end up with a product that is sluggish and unworkable. Consumers would be much better of staying with either their smartphone, or a dedicated device like a Kindle or Nook.

But on the other hand, if you pack in too many features (multiple cameras, the ability to output HiDef video, multiple USB ports, etc.) - then you end up at a price/performance place where people would be better off buying a laptop.

 

[nomik2]

Ya know how we are all going crazy and hating on Moto...

...none of the stuff stated is official. They might make a Wifi version at $499 for all you know.

 

[gloss]

It's a high-end model meant to shock and awe. You're delusional if you think they won't be releasing a more affordable variant, and soon.

 

[jmpnop]

I have a strong suspicion that many in the Android community are waking up to the realization that making an "iPad killer" isn't quite as easy as they thought.

Motorola, as a company, is no slouch. They've got top class engineers, tons of manufacturing experience, and well developed partnerships among supppliers. But at the end of the day, they've found out that making a device thats capable of running Honeycomb doesn't come cheap.

More than anything, I think the Xoom shows how absolutely perfectly Apple got the balance of price/performance right on the iPad.

If you are selling a tablet, if you make it too simple and barebones, you end up with a product that is sluggish and unworkable. Consumers would be much better of staying with either their smartphone, or a dedicated device like a Kindle or Nook.

But on the other hand, if you pack in too many features (multiple cameras, the ability to output HiDef video, multiple USB ports, etc.) - then you end up at a price/performance place where people would be better off buying a laptop.

Motorola Xoom is expensive because of so many features packed into it. There'll be a cheaper version of it which will be competitively priced. Base model iPad costs around 250$ and they're selling it for 500$, they've quite a huge profit margin. iPad currently is the best and when competition emerges, I see the prices going down a bit.

 

[petvas]

Motorola Xoom is expensive because of so many features packed into it. There'll be a cheaper version of it which will be competitively priced. Base model iPad costs around 250$ and they're selling it for 500$, they've quite a huge profit margin. iPad currently is the best* and when competition emerges, I see the prices going down a bit.

Do you have any source to support this? I don't believe that Motorola will bring another model any time soon.

 

[jmpnop]

Do you have any source to support this? I don't believe that Motorola will bring another model any time soon.

Don't have any source but if they don't come out with a cheaper model (memory + no 3G), it'll be a huge flop. My old post wasn't a statement, it was just an opinion.

 

[hcho3]

Even if they release wi-fi model, it won't be 300 dollars cheaper than 3G model...

Come on people. Wi-fi model will probably cost 699 dollars. You can tell that from this 3G device.

 

[darngooddesign]

Even if they release wi-fi model, it won't be 300 dollars cheaper than 3G model...

Come on people. Wi-fi model will probably cost 699 dollars. You can tell that from this 3G device.

It will probably be priced around 650, which is priced against the 32GB wifi iPad with a similar markup.

 

[doboy]

Yeah, I can't understand why people think wifi only will cost significantly less. 3G/4G chip can't be that expensive. Sure Apple puts a premium for 3G model (as they always do), but it also contains a GPS chip for $130 price bump. They may eventually release a wifi version, but not anytime soon. I feel that they decided to release the "carrier" version first to try to maximize their profit. Even at $799 if they require 1 month data and activation, Verizon may be subsidizing it a little.

 

[fertilized-egg]

It will probably be priced around 650, which is priced against the 32GB wifi iPad with a similar markup.

That's a big assumption. We know Apple's margin is much lower with the 16G wifi model compared to with 3G 16G and higher ups. There's no way Motorola can achieve a similar markup to that of Apple when they don't have the economy of scale or the R&D efficiency from existing resources. For years people have scolded Apple for overpricing their goods*, and for once it's Apple who's having the pricing advantage.

People blast Moto for not releasing a wifi model at $500 but I highly suspect the reason is simply that Motorola realized they cannot release a competitive model at that price unless they make it a loss leader which isn't really possible for them at this point. Thus instead fighting the iPad head-on, Motorola is trying to keep their margin up by packing it with features and going through a carrier, hoping they provide enough differentiation and value-added for potential buyers while sorting out price drops for the future.

*(One exception from Apple's high pricing has been the iPod Touch. Most competitors haven't even tried to match Apple here and Samsung just released their own iPod Touch and it's even more expensive than iPod Touch: See my post here)

 

[spinedoc77]

I love how if you want to buy this tablet and use it strictly on Wifi they make you pay $20 for 1 month of 3G to unlock Wifi on the device, as per the footnote on the ad.

"To activate WiFi functionality on this device, a minimum of one month data subscription is required."

Am I misunderstanding this?!? Do they mean if you want wifi tethering you need to start a data subscription? I cannot for the life of me see them forcing you to pay a subscription fee to unlock a hardware feature. If that's the case I see a major revolt against this particular plan, I mean what's next you need a subscription to use the SD card reader or a subscription to play video in 1080p?

 

[vrDrew]

People blast Moto for not releasing a wifi model at $500 but I highly suspect the reason is simply that Motorola realized they cannot release a competitive model at that price unless they make it a loss leader which isn't really possible for them at this point.

I think you're right about this.

The other thing that strikes me about the Xoom is how inept the marketing seems to be.

I usually discount people who claim that Apple's success is due solely to marketing. (IMHO, marketing is just part of Apple's recipe)

But the Xoom's introduction seems to be handled in a way that almost defies belief. Consider the following:

1) Its usually a good idea to under promise and over deliver. Before the iPad came out, there was a lot of speculation that it was going to cost around $1000. And when Jobs announced it was starting at half that amount - it gave the iPad a tremendous positive jolt. But in comparison, the Xoom - which many in the Android community has been holding out as the Honeycomb-powered "savior" of the Android-OS tablet market - shocks people the other way.

2) There really is no excuse for Motorola letting Best Buy handle price announcements "by accident." Would it simply not be possible for Motorola to schedule an event where one of their executives shows off a working device, along with their pricing plans?

3) Why couldn't Motorola, along with Google and whatever mobile provider coordinate their presentations?

 

[darngooddesign]

That's a big assumption. We know Apple's margin is much lower with the 16G wifi model compared to with 3G 16G and higher ups. There's no way Motorola can achieve a similar markup to that of Apple when they don't have the economy of scale or the R&D efficiency from existing resources. For years people have scolded Apple for overpricing their goods*, and for once it's Apple who's having the pricing advantage.

You're right because Motorola has zero experience with electronics so there is no way they could get bulk pricing discounts let alone economy of scale with the components used it the Xoom. Its not like this is a big Droid after all?

They priced this 70 over the competing iPad and the wifi model will be priced a little less over the competing wifi iPad due to the way the price premium is perceived. $70 more than a $600 device is perceived to be a lot steeper than $70 over a $730 device. So the wiw will be priced closer to 650 which is only $50 more than the iPad.

Perhaps I should clarify, when I said markup I didn't mean markup over their costs to manufacture. I meant Motorola's retail markup compared to Apple's retail pricing.

 

[fertilized-egg]

You're right because Motorola has zero experience with electronics so there is no way they could get bulk pricing discounts let alone economy of scale with the components used it the Xoom. Its not like this is a big Droid after all?

It doesn't matter how much experience Motorola has. Apple has even more experience building devices like this and the economy of scale gets even more skewed to Apple's favor if you want to include other products. Apple has iPhone, iPod Touch, and iPad which combined dwarfs the number of Droids made by Motorola, not to mention other devices that use flash memory.

Put it this way: even Samsung couldn't beat Apple's pricing and Samsung is the single most powerful electronics producer you can find nowadays size-wise. The Galaxy Tab should've been significantly cheaper than the iPad judging from the bill of material and yet it wasn't and it happened again with the iPod Touch. Apple has so much pull power that it's known Apple gets the preferential treatment even over Samsung's own mobile department because their sheer order size.

This is why I think Moto is going to fail in the long term. If everyone's using Honeycomb and guys like Samsung, Asus and LG make something cheaper than Moto, what does Moto have that will differentiate their tablets from cheaper Android from the Asian counterparts? All of them have better supply chain relationship and much more extensive retail channel experience than Moto. If Honeycomb is everywhere and everyone's using Tegra2, what's so special about the Xoom?

 

[jb1280]

I think the takeaway from the Xoom experience and the Galaxy Tab experience is that every single OEM who fails to give a price when their products are introduced are going to enter the market with a significantly higher perceived entry price than iPad.

The companies that are transitioning from the mobile phone market to the tablet market will probably have issues since they cannot exclusively rely on the distribution and subsidies by wireless companies.

I think the real player in the tablet market is going to be HP/Palm. I would bet that they will release a 10" device, give a reasonable price on a wifi model, and give a shipping date.