A $799 Xoom Shows Why Apple’s Component Hedging Works

96 Comments

Among the many advertisements during last night’s Super Bowl, Motorola’s (s mmi) spot for its new Xoom tablet gave me pause. The video, shown below, evoked memories of Apple’s iconic “1984” video, which introduced the Macintosh computer 27 Super Bowls ago. How ironic then that given the conceptual similarity between the ads, the Xoom’s reported $799 pricing shows how Apple’s component hedging is going to increase pressure on Motorola and many others in the mobile device market.

During the big game last night, Engadget found the $799 Xoom price tag in a Best Buy (s bbuy) ad. The 10.1-inch tablet was the talk of the town at last week’s Google Android Honeycomb event and made a splash at last month’s Consumer Electronics Show as well. When the Xoom launches it will be a Verizon Wireless (s vz) exclusive, immediately capable of using the carrier’s 3G network and, after an upgrade, it can surf using Verizon’s fast, new LTE service as well. From a point of comparison then, the device will compete directly against Apple’s 3G iPad model (s aapl), which start at $629, or $170 less.

One could argue that the specifications and features of the more expensive Xoom tablet are favorable compared to the iPad. After all, the Xoom’s 1280×800 resolution screen offers more pixels per inch than the 1024×768 iPad display. Xoom also uses Nvidia’s (s nvda) dual-core processor, can play 1080p video, record in 720p and provides a full GB of memory, which is four times that of Apple’s iPad. But to compare the Xoom to the current iPad would be a mistake if, as expected, Apple refreshes its tablet with cameras and better hardware this April. And if history is a predictor, the new and improved Apple tablets will hold the same price points as the current models.

Unlike most competitors, Apple manages to maintain both the price and availability of components by entering into long-term strategic partnerships for parts of flash memory, processors and other bits of hardware. The company finances such deals through the hoards of cash it has on hand: using funds to “pre-pay” for components and likely gaining a discount as a result. Such a strategy helps in two ways. Apple can more easily manage inventory than its competitors and it enjoys cheaper component pricing to help manage device costs. Samsung is in a similar advantageous position because it relies on fewer companies for the components it needs to build smartphones and tablets: the company builds its own processors, displays and flash memory parts. More than half of Samsung Galaxy Tab’s component price is made up of Samsung products, for example.

Motorola on the other hand, is completely dependent upon other companies for nearly all of the components in its devices, and in particular, the Xoom tablet. We’ll know for sure if there’s any Motorola hardware inside after the Xoom launches and is torn down for examination, but few, if any, of the components will be made by Motorola. A tear down of the Droid X, for example, doesn’t list any Motorola parts. Instead, the company has to coordinate the price and availability of components from various vendors — and if any of those parts are also used in similar Apple products, it’s a safe bet that they’ll either be scarce or will cost more. Indeed, the supply of tablet display panels and other components could crash the growing wave for tablet computers for companies that don’t invest in long-term deals for parts.

For the sake of fairness, a truer comparison between the Xoom and iPad prices should use Apple’s 32 GB model with 3G, which is $729, or only $70 less expensive than the Xoom. And as mentioned above, the Xoom adds cameras, a better display and other features. But again, that comparison is against a 10 month old iPad. Come April, we’ll have to see how well the two devices compete both in terms of specs and pricing. My money is on the Apple product being seen as a better deal by most: even though the company is considered a premium brand, smart investments in high demand components will help keep prices at or below products from competitors.

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96 Comments

Andre

The elephant in the room is consumer disinterest in carrier branded tablets. When you’re in the market for a laptop, do you ever ask yourself, “But does it have 3G”?

In Q3 of last year, it’s believed that Apple sold 3.8m iPads in the US. I don’t have numbers for Q3, but in Q4, AT&T is reported to have activated 422k 3G iPads. Assuming the quarters were roughly comparable, that means that less than over 88% of iPads sold are either wifi-only or unactivated 3G models. Consumers don’t want to purchase a second contract disguised as a product.

Sanjay Jha has already warned shareholders that the Xoom won’t be as profitable for Motorola as the company’s phones, since they’ve eventually have to sell the tablet to consumers through retail channels without carrier subsidies. The price that OEMs get from carriers based on exclusivity windows is where the real money is made, at least in the short run.

This means that the iPad, led by wifi-only sales, will continue to dominate in market share over Android tablets.

Mukesh Aggarwal

One thing several people are missing by touting the superior hardware of Xoom is the price itself as an absolute number.
Will people actually pay for a $800 tablet when they can actually get a really high end laptop which can do more ?
I am sure there is a niche market for such devices (diamond encrusted iphones anyone ?) but I just don’t see common folks flocking to Xoom. Apple devices, even though have a high price, atleast have a ‘brand’ which I think is way above ‘Motorola’.

Martin Edic

The timing of the pricing announcement is terrible but the ad was even worse. I had read about it but had to explain to my friends that the generic people in the ad were supposed to be iPad users. This is in a room where two people were using iPads while watching the game. On top of that the ad revealed the difficulty of promoting tablets when they all look like iPads. The iPad has a giant lead as the defining standards in tablet and OS design and everything else looks like an imitator. People want the real deal.
But $800? You have to be kidding me…

Steve W, Indialantic FL

“…had to explain to my friends that the generic people in the ad were supposed to be iPad users.”

Yeah! They should have shown a bunch of dancing black silhouettes wearing white earbuds. No explanations required.

RattyUK

“Yeah! They should have shown a bunch of dancing black silhouettes wearing white earbuds.”
Save for the fact that they’d have been showing the Apple users having too much fun…

Terrence

I had to explain to people that it wasn’t an iPad commercial.. looks like Motorola paid for iPad advertising inadvertently.. lol..

Amos Take

Wow…I feel like a bit of an idiot. I’ve been waiting to get a tablet like the Xoom. I really wanted the bigger screen, and have had to overcome many arguments with my iPad loving friends about the strength of Apple’s app catelogue and reputation of ease of use. But I feel stupid because I shot my mouth off promising the Xoom would be CHEAPER than the iPad. It made sense that Mot would endure razor thin margins to fight back against the first move advantage and the name the Apple brings to the table for my less tech savvy friends. I will still buy the Xoom, but I think this type of pricing has lost the potential purchase of about 5 friends were expecting to get a discount to skip the iPad. Come on Team Android! Time to get aggressive on the pricing and give local boosters like me something to work with!

pk de cville

It’s both the A Team and Apple’s fault.

Apple will buy between 30 and 60 million IDENTICAL highest quality IPS iPad screens this year at a cost point lower than even lowest quality screens.

And Xoon? 2mm would be wildly successful.

But the A Team (numbering 100s) will buy 20mm this year split between (I guess) 15 different screen models! How’s that for inversely differentiating via a massive scale… The bigger and opener the team gets, the more expensive it gets to buy the key parts.

A bet: Apple will sell the iPad2 at a lower price than the A Team can for the next 2 years. And the A Team will be replaced by HP’s WebOS devices.

Steve 'Chippy' Paine

I’m ignoring the price as it’s probably fixed to make carrier subsidy look good and to rake up Honeycomb fans’ money. In the first month of exclusivity. Like the Tab, the price will drop quickly. At $599 it should sell well.
Chippy.

DaveMTL

I’m with you… wait until the iPad2 has sold for at least 30 days and the other major tablet guys show their hands. Then prices will stabilize at what the market feels is “fair”.
Don’t forget that Apple could intro a “iPad1” at a discount as an entry level machine… let’s say 399$. That would force everyone to re-think pricing. Even iPad2 buyers.

Kevin C. Tofel

Could be Steve, but iPad is unsubsidized and folks appear leery of buying tablets with a 2 year contract, which is the fairly standard approach here. So even if the Xoom gains a $200 subsidy and drops to $599, I’m not sure it will sell well against an unsubsidized iPad. Hard to say, but that’s my gut feeling.

Avarice

It would be wise of Motorola to do two things:

1. Fire the “marketing” genius for not releasing a pricing structure that didn’t scare off most Xoom dreamers already.

2. Address the rumors and negativity related to pricing and Verizon’s demands for a fee to begin using this pricey gem.

Sure, this is a great addition to mobile computing, Moto has played the tease game so much that the only mobility mentioned on most forums is the act of potential buyers walking away from a dream.

Rahsut

Im a fan of android but honestly at 800$ its a no sale. Motorola has majorly flopped with this one. Their Atrix4G phone + laptop dock combo is 500$ thats already cheaper than this tablet and it has the SAME SPECS 1 gb ram, u can add SD storage and its got the tegra2 dual core processors. so at the price point there is nothing selling the XOOM besides screen size which the laptop sock offers anyway… People will just buy iPad (which i think is a stupid device) but hey thats MY OPINION. people can do whatever they want..

Bottom Line : Xoom , great idea, terrible price.

DaveMTL

“hey thats MY OPINION”. Correct, and mine can be totally opposite and both be true based on what our needs are. I also agree that IF I were an Android fan and insisted on buying MOTO, I would also, like you, lean towards the combo solution. I need a smartphone and would like a tablet. I would never use both at the same time. I need a data plan for my phone… why for both if I only use one at a time? Your logic is good.

Rahsut

Yeah ive heard the XOOM might be subsidized to 499$ because it would have to seem reasonable against the atrix4G laptop combination(and an ipad for that matter, though the ipad 2 is on its way….) Im not really a tablet person (id rather get a netbook the ASUS 1215n or if i did get a tablet the 7 inch version Samsung Galaxy 2 based on specs if i did get a tablet because of portability). If its not subsidized it would be a waste of all this pretty expensive and decent advertising. All in all I have a Nexus S and i must say having the google branded version of Android is better than getting something from another manufacturer with blaotware. Who knows i might just wait and see if Google comes out with their own tablet.

ersouza

Sorry, I don’t buy the assessment in this article that Motorola is just getting squeezed on component costs and that accounts for the vast majority of the price tag. There are any number of laptop models that offer everything the Xoom does and then some for hundreds less. I would be very surprised if a teardown found much more than $400 worth of components in the Xoom, and that’s being generous.

DaveMTL

I don’t get some of the “superior” specs. After a year the best they can do is 1280×800 vs iPad’s 1024×768! How about ExoPC’s 1366 x 768 pixels? And the ExoPC tablet is not “young” either. Dualcore is something coming in pretty much all tablets in 2011 including most Smartphones. So nothing extraordinary there either. The memory… 4 times more is true but it is only 2 times more than the iPhone from mid-2010. When you calmly look at the specs in the context of 2011 tablets. It ain’t all that hot. I suspect most Honeycomb tablets will be as good if not better with a lower price point. Especially for entry. Imagine by Fall 2011!
Lastly, what about all those rumours of the iPad2 resolution… let’s see:2048×1536 or 2048 x 1546 or the retina 2560×1920! Point is that Apple has requires little improvement to pass the XOOM. That sounds scary to me if I were a Motorola investor.

Ken Berger

The big question is will Motorola still be a viable company if their Android dreams fail.
Their phone business is in jeopardy s Android sales a being killed by the iPhone coming to Verizon (Sprint and T-Mobile is likely once Apple can make enough).
Their hope of Tablet business will be dashed if they can not produce units at the right price, which the $800 seems to portend.
If Apple follow form (and this is speculation on my part) the iPad2 will be the same price as existing units (with better specs and features) and the existing line of iPads will be at new reduced price points, eating up the lower end of the market and increasing the iOS installed base to a point where Motorola and Android become less than interesting.
Also in the tablet world apps are even more important that the phone world. Google / Android is making progress here but still way far behind, and all apps will need to be updated to be useful on 3.0 which will not happen if there are no strong sales of tablets to entice developers to do so (not to mention how 3.0 plays into the Android phone world)

kevson247

There is still hope for the Xoom. It is a better product than the iPad. Motorola just needs to create more options (16GB model, wifi only models) which will lower prices. They also need to ditch that minimum of 1 month data requirement in order to activate wi-fi. I know it’s just $20, one time, but still. They’re basically saying “since we got $800 from you already, we’ll take another $20”.

Follow Motorola Xoom developments at http://www.xoomblog.com

Ronald Carter

Every “strength” is almost always a “weakness”. Being in a long-term relationship with a supplier also means that if that supplier has a shortfall, either in quantity or quality (the white iPhone shell, for instance), Apple then suffers.

I am sure that Motorola is able to negotiate quite favorable terms with their vendors, and has the flexibility to source from multiple suppliers for the same components.

The Xoom appears to be the superior product with the price reflecting that and the iPad 2 already appears it will fall short of the bar the Xoom will set.

DaveMTL

“the iPad 2 already appears it will fall short of the bar the Xoom will set.”
Based on what exactly?
Screen? It barely beats a year old machine with a very nice IPS display…
CPU? Like many Smartphones will have, including Moto’s!
Memory? iPhone 4 already has 512MB, twice the older iPad. I think we can assume that the new iPad will have at least as much as the iPhone. Probably more.
the O/S: Oh yes… the REAL tablet O/S which has been proving itself with nearly a year’s worth of service in customers’ hands… that was what? 15 Million clients right? OH WAIT!!!! MY BAD!!!! that’s iOS. Honeycomb is the totally unproven tablet OS. You know, the one which went from 3 or sometimes 4 standard buttons to…none! Wow! That’s just one more then the iPad right? These Android guys must really admire Apple’s work.

Ed5

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

Juan

An open environment which is faster, allows multitasking, with flash support and did I say open? You can put there whatever you want withouth having to ask Apple for permission. Whatever Apple will do is irrelevant, not to mention a guessing game, because it will still be CLOSED, without flash support and you will have to wait for their approval.

As for memory and storage, they are both memory by definition. The former volatile, the latter is not. That’s all.

DaveMTL

I would love to understand that word “open”. If you try to mod anything and Google does not like it, they remove your right to use the words “Google, Android, Google Apps MarketPlace”. Which pretty much your OS useless since no one would buy it. Just check out the lawsuit between Google and SkyHook. As for Flash, that will die away as more people use apps for games. Should Apple wish, they can implement Flash on iOS in a heartbeat. There goes a much vaunted advantage in just one synch (yep… that nasty iTunes app which lets pretty much everyone upgrade in a snap… like all Android phones, right??!?)

Juan

What part of you don’t have to ask for permission you didn’t understand? And that’s only part of what open means when it comes to technology. You conveniently ignored the multitasking part and you brought Google and Android phones into the argument. Straw man, anyone? Being open has nothing to do with Google policies nor Android phones update mechanism. But then again, you said it yourself, you don’t understand what open means. And that’s where your lame arguments, like chicken, come home to roost ;)

pgattocpa

Juan:

With respect, your original post’s argument for *open* states that with Android one does not have “to ask Apple for permission.” Your implication is that one does not have to ask permission of anyone, much less Google, to modify Android. Strictly, and parochially speaking, true.

However, DaveMTL’s point regarding Google’s control over who can use ““Google, Android, Google Apps MarketPlace” is exactly correct in the real world. The granting of the “permission” lies in the developer following strict guidelines for the flavor of Android that Google wants people to follow.

Android openness has caused fracturization. This developer’s version runs this, but not that. The other developer’s version runs this and that, but not the other thing. Google wants a flavor of Android that it can control such that if anyone want to tie their product to Google’s name, then they HAVE TO SEEK PERMSISSION by following Google’s specs.

DaveMTL’s argument is not a strawman. It is a fact.

Now DaveMTL’s statement that a developer that does not adhere to Google’s specs makes their “OS useless since no one would buy it,” is merely an opinion that I believe the market has shown is wrong. There are many more Android devices sold that do not adhere to the Google specs than those that do.

Now the market will determine whether Google’s specs will “win out” by “Darwinnowing” out non-spec compliant flavors. However, I doubt that would happen. One of the few ways that Android can differentiate itself in a sea of sameness is to have one spec that is better than the rest.

I think if you worried less about the strict, technical correctness of an answer and more about the practical implications you would be better served.

For instance, your statement, “As for memory and storage, they are both memory by definition. The former volatile, the latter is not. That’s all,” completely misses the point that the OP confused OS memory with additional storage. Does the fact that the OS memory is volatile and the other non-V matter? No, the OP was confused and other posters, including the author corrected him.

I’m sure your parents are proud that you know the difference, but really, lighten up.

Terrence

how can people be so ignorant?

if iOS doesn’t multi-task.. how is it i can play music, surf the net and get my Navigon GPS instructions read out loud to me all at the same time?? are you suggesting that iPhone really do run on magic.. LMAO.. iOS has had multi-tasking since 4.0 (4.2 on iPad)

please educate yourself! you’re looking very foolish

Matt

Apple can afford to sell the iPad for less, because they are raking in money through app and itunes sales. Motorola doesn’t make any money after the Xoom is sold. They need to make all of their money upfront. Its High School economics.

DaveMTL

Excellent Point.

Google makes money from the ads served on Honeycomb’s apps, money from app sales. Apple makes money on the machine, iTunes, App Store, iBookStore, iAds…

Moto makes money on a machine they’ll have to ride down that price tunnel which leads to competition against no-name Asian tablets which have the exact same parts, exact same OS and almost zero R&D and advertising costs.

bmovie

Ahh, to woo the heart of a fair young maiden, one must have $800 and a data plan. No money? No honey!

lithale

Data plan is NOT needed. You can use Verizon’s service if you wish. It’s built in. Or you can WiFi.

Yacko

From the tcgeeks website:

“There was a leaked “Best Buy” ad which confirmed that the Motorola Xoom will definitely be in that price range but the most interesting part of that ad was a restriction that seems a bit odd to have in place: You can’t enable Wi-Fi unless you sign up for at least one month of 3G service.”

Rumor, mistake or reality?

James

You need to subscribe for atleast one month with Verizon to enable wi-fi.

No subscription == no wi-fi.

Josh

I’m looking forward to April, when price of the XOOM goes down and everyone who bought one between February and April freaks out.

ahniwa

Price comparisons with Apple products are ridiculous, imo. I’ve thought of Apple as being overpriced for years. Especially their computers are much more form and much less function for more money than a similarly priced PC would cost. I think there is still a schism between Apple and non-Apple users, which means the Xoom will sell fine to the latter market despite being priced over the iPad. It will be much more interesting to see what happens when all the other non-Apple competitors finally get their products into the tablet market.

daveMTL

Kinda like what’s happening at Verizon where BB and Android ran the shop. Now that there is free competition and choice, we will be able to see what the average consumer thinks is overpriced and how much function they actually get. MY GUESS is that most people don’t care about extra ports and stuff if they only use them to make up for the poor experience they get on the machine. (Tried out the EXOPC tablet for the first time last night… ouchhhhh… now I know why it has a port for a keyboard AND mouse)

As for the Verizon thing, here is what was reported on Verizon’s site: “This was an exciting day,” said Dan Mead, president and chief executive officer for Verizon Wireless. “In just our first two hours, we had already sold more phones than any first day launch in our history. And, when you consider these initial orders were placed between the hours of 3 a.m. and 5 a.m., it is an incredible success story. ”
Sounds promising to me.

Tracy

Xooooooooooon
Whoops I mean zooooooooon

No wait, it’s xoom?

All these apple knockoffs with similar names. It’s so confusing.

DaveMTL

Why? Can’t understand your logic. I can see other Android tablets being much cheaper but not the XOOM. If they lower their price much lower that quick it means: A) They were cheating their early customers and now have the right price or B) They will be selling at no profit (bad news) or C) Both (Really bad news).

Here’s my bold prediction: All tablets will be cheaper in the coming years and have better specs! Please don’t ask me to explain my logic here. :-)

dave blevins

$100 is not enough in 6 mons — it isn’t even enough NOW. Moto should have made it $300 at start (w/o carrier mandatory involvement) to grab the market leadership and sell a GOOGLEplex (groan) of ’em. This is a matter of just not enough at too high a price. For goodness sakes, for $800 you can buy a wonderful laptop with all the bells and whistles (yeah I know it isn’t the same, but why would a “pad” cost or priced so much more)

Steve W, Indialantic FL

Dave gets it!

Tablets were around for 20 years before the iPad. Consumers did not buy them because they cost MORE than PCs. Along comes the iPad at a price that is less than the price of the cheapest MAC, and the consumers stand in line to buy it.

The problems most competitors will have is that matching the iPad’s price will still leave their products costing MORE than their PCs, and MUCH MORE than their Netbooks! Motorola may catch a break, because they don’t make a PC. NOT! Because they chose Android, they will be lumped in with all the other Androids.

However… There is another possibility. Maybe Moto priced the Xoom in anticipation of another (Droid like) BOGO sale.

Mega

Not sure if you aware that Moto makes money from each device vs Apple makes money from each device+itunes store sales. Google would love Moto to price it at $300 but they won’t be willing to subsidize the price given that they are already giving away Android.

AK

@DLL, in 6 months we’ll be talking about iPad 2. That’s the point of the article. So perhaps it is better to hold off any technical comparison for now.

Les Slater

One thing Xoom’s got going for it that Apple doesn’t is the Android OS. It will be the Android competition, not necessarily from Motorola, that will put pressure on the closed iPad. In the short to medium run my bets are on the Droid ecosystem.

pk de cville

The Droid ecosystem is in danger of slipping into crowd behavior. Too many devices (many cheaply made by noname brands), too many malware exploits, too many fragments, no center of control.

Open and free will turn out to be pretty expensive and unprofitable for most businesses.

And then we’ll look to user loyalty to the brand to drop like a rock.

Android may become 2013’s Yugo, if it doesn’t mend its ways.

Jeff

That price point will certainly hurt the Motorola Xoom, regardless of how much better it is than an iPad. You can grab an iPad starting at $499. So you can get a tablet for $300 less by going with Apple. Motorola needs to come out with a $499 alternative that will make people think twice about going with the iPad. At $799 the decision is made for most people, go with Apple.

anonymous

This article lacks a basic knowlege of Apple’s Cashflows – they do not pre-pay for anything – Apple is one of the most cash efficient companies in the world, they are more efficient than walmart, and pay vendors after they are paid by customers allowing them to operate on their customer’s cash. This allows them to generate significantly higher profits on the same revenues than their competitors. It is not clear if their costs are lower than others however, as firm’s such as isupply’s numbers have never been confirmed. The author should have based some part of this article in reality – in addition, this type of consumer product pricing has very little to do with the cost of production and more so as to what customers are willing to pay….

Anon

This would completely invalidate the entire article. I searched the comments for some shred of how “prepaying” would be advantageous. Put simply, prepaying doesn’t guarantee lower prices because even if they are lower it doesn’t take into account what the value of the cash itself is. It also implies Apple “invests” in its supply chain rather than the supply chain investing in Apple.

The commenter’s version of the story sounds like a much better business proposition.

DaveMTL

They started doing this back in the iPod’s heyday. They have been operating this way for years. It permits stable and low prices and shuts out the others trying to compete. It has risk as well since they are on the hook for a technology which could be surpassed by a better one.

pk de cville

Sorry.

You do the work, but you’ll find a very clear explanation from CEO Cook explaining that Apple has advantageously prepaid $3.9B in supplies.

The prepayments even support the building of new factories dedicated to supplying Apple’s needs. Apple prepaid $1.5B about 4 years ago to kickstart the move to flash memory back in the day.

James

In the Xoom article you write, “…A full GB of memory, which is four times that of Apple’s iPad.” This just isn’t true.

James

Anyone else see this:

“Xoom also uses Nvidia’s dual-core processor, can play 1080p video, record in 720p and provides a full GB of memory, which is four times that of Apple’s iPad.”

a full GB of memory is either a very small amount or a type.

Kevin C. Tofel

Memory isn’t the same as storage, so there’s no typo. The Xoom will offer 1 GB of RAM memory and 32 GB of storage. Apple’s iPad has 256 MB of RAM, which is 25 percent of the Xoom’s memory. The iPad’s storage is available in 16, 32 and 64 GB.

Kevin

If you are an Android fan you likely have an Android phone and are pretty familiar with using Tethering which is FREE to an unlocked handset. With that in mind, such a user would likely NOT pay $800 for a Tablet that requires a Data plan considering they are already paying for a Mobile Data plan that they can easily Tether.

This is the big problem with A Class Android Tablets. They are all introduced as “Data Plan Only” devices. Higher prices with redundant Data Plan requirements make them less likely to be a contender of the ever popular Apple iPad.

I myself started with iOS, made the switch to Android but will NOT give up my iPad until a Tablet with iPad comparable features and price is available.

NOTE: #1 feature lacking on Android found on iOS is A Class Video Streaming

I tether my iPad to my Android Phone when necessary but mostly only use it at home or in the office where WiFi is readily available. Considering I pay for an Internet Connection for my Home, one for my Cell Phone and one for my Wife’s Cell Phone, I do NOT see a logical reason for paying for yet another Data Line.

1) Data Plan for Home
2) Data Plan for Cell Phone
3) Data Plan for Spouse/Family Cell Phones
4) Data Plan for Tablet(s)

This is NOT a good idea for anyone but the carriers.

That just doesn’t make sense any way you look at it.

Until Android Tablet manufactures figure this out, they are just pissing in the wind.

Is the Motorola Zoom an amazing Tablet. Yes indeed it is but at this price point with required Data Plan it is DOA (all but for those people that have deep pockets and the need to own everything).

Somebody needs to do it right.

Learn from the people you are trying to compete with.

bobm

Tethering: Tethering is also *free* to a unlocked iphone, I don’t think either are legal on the AT&T network but that’s besides the point.

The main issue I see is that you can get an iPad starting at $499, of course it’s not a feature rich as the Xoom but not everybody needs all of those features.

I wonder if everyone would have compared this to the Apple 1984 add if: a: the 1984 book wasn’t on the opening screen and more importantly b: Moto didn’t tell us that this was supposed to be like 1984.

Personally I’m hoping Amazon announces a Nook like device that has enough horsepower to do what the Nook struggles with. That would be my next device.

acupunc

A color kindle with honeycomb, allowing it to be a full tablet, 7″, with a pixel qi screen option? That just might sell ;)

acupunc

Personally I think this price is inflated because of Motorola’s dependency on carriers more so than hardware. The Asus transformer is said to start at something like $400 and gives you a great dock for a netbook. Hardware wise it’s very similar to the Xoom. I don’t see where the extra $400 for the Xoom is when you look at the hardware between the two devices.

So, at this moment I think the Xoom is attempting to be sold as a luxury device similar to the iPad and therefore charging in that same price range. Until we see HP, Asus, Acer, and MSI all hitting the market with high-end Honeycomb tablets to “flood the market” with tablets to increase adoption similar to what happened with netbooks we really don’t know what price advantage Apple really has.

Personally, I don’t think Apple will ever have a price advantage because that isn’t their game. They want to keep their product priced high otherwise it will look like all the others–they want that boutique price point on all their products. However, they will make a much larger profit on their hardware than others. . . so, yes, by hedging they keep that lofty profit margin high.

tom

I don’t get it.

It’s got a real tablet OS with true multitasking, Flash, unlimited file sharing, printing and management etc.

It’s much faster with a dual core processor.

It’s a better tablet in every way.

Yet, you complain that it’s some negligible $70 more than the far inferior iPad?

Gerald Shields

Uh, it’s $170 more than the “inferior”(?) iPad. Then you got to get a two-year contract? Heck, to each it’s own. Me myself, I wouldn’t buy it at that price.

James

$799 is the full price. You are not required to get a 2 year contract. You are however, required to subscribe for atleast one month to make wi-fi available. It comes with wi-fi locked.

highlander

Seriously, Tom, read the entire article. Kevin’s argument about superiority involves the next iPad..

Tom

Feature/Function is not why people buy the iPad. They buy it because they like the melding of Apple Hardware/Software. It just works and they keep it simple. Most people who buy it could care less about gigaflops yadda yadda.

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