Motorola Xoom Receiving Update, Flash: Will It Help?

Motorola’s (s mmi) Xoom tablet is now getting its first software update in preparation for Adobe’s Flash Player 10.2 next week. That may not be enough to spur interest; one analyst today describes the Xoom sales as “tepid” to this point. Part of the challenge revolves around improving device stability because consumers will compare the tablet’s user experience and ease of use to Apple’s iPad 2, which launches today. So far, Xoom isn’t mounting much of challenge.

Indeed, my own hands-on experiences with the Xoom have shown an operating system that appears to be rushed: few apps are optimized for Google’s Honeycomb (s goog) platform, the memory card slot can’t be used and core apps crash on occasion. Compared to the iPad experience, the Xoom shows plenty of potential, but may not be ready for prime time as a consumer electronics device.

I had hoped that this first software update would address some of those concerns, but Android Update (HRI66) is a small 15.4 MB in size and the description doesn’t mention any major fixes:

And after the installation, which went without a hitch, I didn’t see any improvements in terms of stability: an application crashed within five minutes. This instability may be impacting sales of the Xoom according to Jefferies analyst Peter Misek, who provided this statement to ZDNet:

Xoom sales have been underwhelming. While marketing has just started we believe MMI will likely have to cut production if it already has not done so. We believe the device has been a bit buggy and did not meet the magic price point of $500.

Misek takes it a step further and expects Motorola to cut production due to lower than expected demand. And he said Motorola could even drop prices to better compete with Apple’s offering, though it may not have much room to move pricing. Part of the issue stems from having no low-priced, Wi-Fi only model to compete with the $499 starting point for an iPad 2 — or now $399 for an original iPad. Instead, Xoom is offered in a one-size-fits-all $799 model, unless consumers opt for a 2-year contract to save $200 up front.

Even though the Xoom was pushed out the door a little too early, the fact remains: it’s out there. Motorola can drop production or cut prices, but the best remedy is to invest every effort possible with Google to bring the Honeycomb experience to the level that customers expect for a consumer electronics device.

Adding Flash could help offset other issues for some, but it remains to be seen how well Flash does or doesn’t run on the device. I’ve seen poor Flash performance on devices with a single core although I expect Flash to run better on the Xoom due to its use of Nvidia’s Tegra 2  (s nvda) chip: it has two CPU cores and advanced graphics capabilities.

Flash alone isn’t enough though. Tech saavy folks and device tinkers may not mind dealing with application crashes, but the average consumer surely won’t. Given the iPad 2 sales frenzy underway right now, Motorola has to step on the gas pedal to turn a marginal tablet experience into a positive one.