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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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