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Motorola Xoom Pricing Confirmed. But Will It Sell?

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The rumored $799 price for a Motorola Xoom tablet is rumor no more: Motorola Mobility CEO (s mmi), Sanjay Jha confirmed the $799 cost for his company’s 10.1-inch Android tablet Wednesday. Reuters reports the price to be unsubsidized from Verizon Wireless (s vz), which means there’s an opportunity for lower pricing if the carrier chooses to sell the tablet with a contract. Consumers that don’t want a mobile broadband connection can purchase a Wi-Fi-only model for $600, said Jha. The Xoom’s cost again illustrates Apple’s ability to create products by pre-purchasing important device components. But the key unanswered question that could influence Xoom’s success is the data plan pricing.

What tablet makers to this point have failed to recognize is something I pointed out in March of 2010: Apple’s approach to mobile broadband data for the iPad was a game-changer. By working out carrier deals for buckets of monthly data and no long-term commitment, it offered flexibility for consumers to use data one month, but not be obligated to use it the next. And device upgrades are less painful because carrier subsidies and early-termination fees for contracts are a non-factor. Verizon may use the same data model for the Xoom, but that’s the big X-factor at the moment, and it could make or break Xoom tablet sales at $799.

When comparing the Xoom to Apple’s iPad (s aapl), the Wi-Fi models are actually the same in price: both devices with 32 GB are priced at $600. But Apple’s 3G model only boosts the price by $130 as opposed to the $200 bump for Xoom. Part of this cost difference is likely in the radio chip used by Motorola, because although the Xoom will initially work on Verizon’s 3G network, it will see an upgrade for consumers who which to use the carriers fast new 4G / LTE network. Apple has no such upgrade path in its current iPad devices, so there may be a differentiating factor there in Motorola’s favor, assuming customers find Google’s new Android Honeycomb platform (s goog) appealing.

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19 Responses to “Motorola Xoom Pricing Confirmed. But Will It Sell?”

  1. This cracks me up. Someone would want to buy this why? I can get a great notebook for this price that will do way more than tablet form factor is built for. Has the American consumer gotten so gullible to buy whatever is pushed at them, irregardless of utility? It appears so.

    • Because you don’t need real keyboard and full OS such as Windows or Linux in $600 notebook level, tables are suitable for simple web browsing, occasional email, book reading, video and even game play, they are light, they don’t need OS maintenance, and navigation with fingers on the screen for certain purposes is better than touch-pad or mouse.

  2. I have zero interest in a 3G/4G version of a XOOM tablet because I don’t want the recurring monthly data fee (plus I don’t want to pay the extra $200 for the ability). I carry around an Evo and I can wirelessly tether a tablet to that. My guess is that the wifi only version will sell well. The 3G/4G? Not so much.

  3. And what about all of the other specs the iPad does not have such as faster dual-core processor, expandable external memory, dual cameras, HDMI out, etc etc. I think that the same price point as the high end iPad for the WiFi version is very reasonable. The Verizon 4G capable version is overpriced but I do not think that it will sell at that price after a few months.

    • Good point although I’d expect the next iPad to have some of those features in the very near future. The WiFi price isn’t all that bad, but it would be nice if Motorola offered a 16 GB lower priced model to better compete with the entry level iPad.

      • That would be nice but then you strip out the goodness and I would not personally buy it. I think once we get other Honeycomb tablets out there and see what Apple has for iPad 2, these prices will fall. This is the first Honeycomb tablet so I am not too surprised at the initial pricing although $800 kind of made me vomit a little.

      • You really don’t think that is in the near future? Why offer your cheapest tablet when you can get the early adopters, and Geeks like me, etc. I expect a 16 Gig within 6 months or more likely exactly when the IPAD 2 is released, completely undercutting Apple. I think they are already made waiting for distribution. Anyway, thats what I would do to maximize sales, market share and most of all profits at the same time going after Apple.

  4. Lucian Armasu

    I don’t think it will be such a big factor. Even Apple had the most sales from the wi-fi only version. I don’t think most people treat tablets like phones, but more like laptops, so there’s a much lower chance to be in a situation where you need Internet for your tablet, and you don’t have access to a wi-fi connection.

    I also hope carriers won’t get the same kind of power they get with smartphones. If most people buy unsubsidized wi-fi only versions, they won’t.