Does Motorola Need an Less Expensive, WiFi Only Xoom?

[atakin77]

I'm a bit confused here... Wasn't there a report a week or two ago that the bill of materials on the Xoom was closer to $249 (ipad at about $225) or something like that?

As for pricing, Motorola and others need to get their prices at or below the iPad for an equivalent model. Until they do, Android tablets will remain a high-priced novelty. I want an Android tablet in the worst way, but I just cannot justify $900+ (tax, a case, etc.) for a Xoom. Not to sit around playing on the internet while I watch tv or to ready a book on at the airport.

Having great margins is important, but one needs customers too. At this price, there are few. Motorola really messed up this release. Hell, the Xoom isn't even fully functional yet, and to my knowledge, they haven't even said when it will be!

 

[thunderstruck]

278 for the Xoom, 245 for the iPad.

'Xooming' In: Researchers Say Cameras, Display Add to Costs - WSJ.com

 

[milominderbinde]

278 for the Xoom, 245 for the iPad.

'Xooming' In: Researchers Say Cameras, Display Add to Costs - WSJ.com

Thanks for that link. OK, if we believe the Wall Street Journal, the $800 Xoom costs $278.

Motorola has additional costs for R&D, distribution, etc., but when you are a year late to a market, it may be that at first you don't make the big margins. Once you establish a strong base, then you can keep your price as costs continue to fall.

For Apple, selling the tablet is just the first step in a long revenue stream. Users buy apps, subscriptions, music, movies, and books. If you buy a Bose music dock, Apple gets a cut because of the patented Apple connector. Some estimate that an iPad user will spend about $10-$20 a month for the life of the iPad. So even if Apple barely breaks even on the initial sale, they have created a revenue stream for months and years to come.

Motorola will see very little future income so they have to make their money up front at the time of sale.

Google on the other hand has lost money at the time of sale because they have a huge investment in R&D and make nothing at the Point Of Sale. But Google has a huge "back-end" from the ad revenue "clicks" that will be made on this device over it's lifetime. Plus app sales are increasing and Google Books and Google Music should be coming on.

Google subsidizes the tablet maker by not charging manufacturers for Android. Google needs to be doing more than that and actually paying tablet makers to make tablets so that they can reduce their prices.

When you are late to market, you have to match or exceed the leaders specs and undercut the price. Look at how Kia did itwith the Forte.

 

[scorpiodsu]

Thanks for that link. OK, if we believe the Wall Street Journal, the $800 Xoom costs $278.

Motorola has additional costs for R&D, distribution, etc., but when you are a year late to a market, it may be that at first you don't make the big margins. Once you establish a strong base, then you can keep your price as costs continue to fall....


When you are late to market, you have to match or exceed the leaders specs and undercut the price. Look at how Kia did itwith the Forte.

Exactly.

 

[original00]

Most of us complaining about the price are really complaining about the lack of choice. I agree with most here that motorola is pricing themselves out of the market and the ipad/ipad2 will continue to grow sales as most new tablet customers will opt for them.

I honestly want to think that motorola understands basic business principle and the only reason they are doing this is because they have a deal with verizon that will net them more in the long run (phones, other tablets). I feel we all underestimated the relationship b/w moto and vz and its sad the customers have to pay for this. I think the atrix shows moto's desire to break the hold vz has over them as they try to release products on other carriers like samsung currently does

 

[milominderbinde]

Most of us complaining about the price are really complaining about the lack of choice...

That is really it. Many are not interested in 3G and if the microSD slot gets fixed, you can go from 16 GB to 48 GB whenever you want for $80.

You can get an iPad 2 for WiFi only for $500. The Xoom is $800. That's a 60% surcharge. The Xoom has a better display and a microSD slot but the iPad 2 has 65,000 more apps and is thinner, lighter and according to Engadget, insanely fast.

But for many, insanely fast does not matter. The iPad 2 is insanely cool.

I hate Apple but the Apple store is like going to a spa. Apple customers sit down, learn everything, get their email, Facebook, Twitter, apps, and everything else setup.

And they get to say "YES!" when their friends all ask, "Is that the new iPad 2!?!"

But if they go to the Verizon store it is like going to a meeting of the Computer Club. For people like us, it's fun. For the rest of the world, Verizon is like a trip to the dentist.

And when their friends all ask,
"Is that the new iPad2!?!"
: "No, I got something else..."
Friend: "How much did you save?"
: "I paid 60% extra..."

Motorola and Google can price the Xoom so that it flops or is a homerun. $800 is not the homerun price.

Google can't fail in Tablets. Even if they have to subsidize a billion on this like Microsoft is doing with Nokia, Google has to make the Xoom win.

 

[barkomatic]

That is really it. Many are not interested in 3G and if the microSD slot gets fixed, you can go from 16 GB to 48 GB whenever you want for $80.

You can get an iPad 2 for WiFi only for $500. The Xoom is $800. That's a 60% surcharge. The Xoom has a better display and a microSD slot but the iPad 2 has 65,000 more apps and is thinner, lighter and according to Engadget, insanely fast.

But for many, insanely fast does not matter. The iPad 2 is insanely cool.

I hate Apple but the Apple store is like going to a spa. Apple customers sit down, learn everything, get their email, Facebook, Twitter, apps, and everything else setup.

And they get to say "YES!" when their friends all ask, "Is that the new iPad 2!?!"

But if they go to the Verizon store it is like going to a meeting of the Computer Club. For people like us, it's fun. For the rest of the world, Verizon is like a trip to the dentist.

And when their friends all ask,
"Is that the new iPad2!?!"
: "No, I got something else..."
Friend: "How much did you save?"
: "I paid 60% extra..."

Motorola and Google can price the Xoom so that it flops or is a homerun. $800 is not the homerun price.

Google can't fail in Tablets. Even if they have to subsidize a billion on this like Microsoft is doing with Nokia, Google has to make the Xoom win.

Google won't fail in tablets, but everything isn't riding on the Xoom as you suggest--it could flop miserably and Google/Motorola will just move on to the next piece of hardware until it gets a hit. Conversely, Apple *needs* to make the iPad a hit -- because its the only tablet running iOS and always will be.

 

[milominderbinde]

Google won't fail in tablets, but everything isn't riding on the Xoom as you suggest--it could flop miserably and Google/Motorola will just move on to the next piece of hardware until it gets a hit. Conversely, Apple *needs* to make the iPad a hit -- because its the only tablet running iOS and always will be.

Google very publicly has said that the Xoom is their flagship tablet.

The Xoom is $800 for WiFi only. Google needs to step in and make this work. They know that how you beat the entrenched leader is to beat every spec and be cheaper.

A WiFi Xoom at $400 could take on the original iPad now at $400.

Engadget just finished their test of the iPad 2. It is in fact nearly twice as fast as the original iPad. The battery does last longer. The iPad 2 browser is 5 times faster than the original iPad with 4.2. The iPad 2 is only $500.

I don't think Google had any idea how fast this would be coming at them. As much as I hate Apple, tomorrow they are going to school Google.

 

[Woosh]

Google very publicly has said that the Xoom is their flagship tablet.

The Xoom is $800 for WiFi only. Google needs to step in and make this work. They know that how you beat the entrenched leader is to beat every spec and be cheaper.

A WiFi Xoom at $400 could take on the original iPad now at $400.

Engadget just finished their test of the iPad 2. It is in fact nearly twice as fast as the original iPad. The battery does last longer. The iPad 2 browser is 5 times faster than the original iPad with 4.2. The iPad 2 is only $500.

I don't think Google had any idea how fast this would be coming at them. As much as I hate Apple, tomorrow they are going to school Google.

Got a link to where they say its a flagship device? I have seen Google showing it off but nothing to say its a flagship device.

Considering the Nexus One was pretty much a flop, I srsly don't see your reasoning. Android OS is still the number one OS even with their "flagship" device not selling billions. It will probably be the same way with tablets.

So one "news" company finishes a test of a product(Who is generally Apple bias btw) and you quote it as fact? O and of coarse the ipad is fast. Its locked down and can't do anything.

Absolutely NOTHING is coming at Google. The small upgrades of the ipad are great for an ipad. But Android will have likely 10 big name makers in the next year. A whole variety of tablets, makers, designs, overlays, and features to fit nearly every persons individual needs. Just like they do with phones.

We have already seen the Xoom WiFi priced at what the ipad is priced at. Even though they are technically still rumor ish(with a confirmation by the head of Moto)this IS competition for the ipad and its not even close to the competition they will receive before the next ipad hits markets.

As far as Google being schooled.....Srsly? WITH WHAT? Google makes no hardware. So they aren't going to magically be better in that direction since Google isn't in that business. Do you rly think that the ipod/iphone OS is schooling comparison to a stand alone made OS for tablets?

The fact is that Apple will sell more units then any one maker because they control the ecosystem. If you think the most sales = best item then enjoy your top of the line Toyota or the delicious prime McDonald's burger.

 

[milominderbinde]

Got a link to where they say its a flagship device?...

We have already seen the Xoom WiFi priced at what the ipad is priced at. Even though they are technically still rumor ish(with a confirmation by the head of Moto)this IS competition for the ipad and its not even close to the competition they will receive before the next ipad hits markets.
...

Here is Andy Rubin, Android VP demoing the Xoom prototype for the first time and explaining what the Xoom means and the special treatment:
Full Interview Video of Google Android Head Andy Rubin at D: Dive Into Mobile | Kara Swisher | BoomTown | AllThingsD

Here is where the Motorola Mobility Inc.'s Chief Executive Sanjay Jha said that, "Motorola will release other tablets by the end of the year..."

That's a promise of new tablets by December 31, 2011, but no promise of what.

What is the link that shows Jha confirming a rumor that a WiFi only Xoom is out now?

 

[ravizzle]

wifi xoom is coming march 27th according to droid life and a staples ad. its $599. I created a thread with source links.

 

[milominderbinde]

Apple iPad 2 sales seen clearing 1 million units | Reuters

(Reuters) - Apple Inc sold close to 1 million units of its next-generation tablet computer during its debut weekend, analysts estimated.

By comparison, the original version of the iPad, which launched in April of 2010, crossed the one-million mark 28 days after its launch...

"Our field checks over the weekend indicate that the iPad 2 sold out at every Apple and non-Apple store we contacted," White wrote in a research note. "In fact, all the stores had worked through iPad 2 inventory by Saturday afternoon, and there were no new iPad 2 deliveries on Sunday."

...Best Buy on Friday said some of its outlets ran out of the tablet and its accessories within 10 minutes...

 

[milominderbinde]

Here is another leak that there will be a Xoom 16GB WiFi:
TouchPad set for a June release, priced from $499; 7-inch coming in September? [/URL]

Base prices and release dates from the photo
Motorola 10" - $649 - March 17th
Blackberry 7" - $499 - March 27th
- - - -Dell 7" - $499 - End of march
-Samsung 7" - $499 - End of march
- - - Acer 7" - $399 - April
- - -HTC 10" - -TBD - June
- - - Dell 10" - $499 - June
- -..Acer 10" - $449 - June
-Toshiba 10" - $499 - June
- - -..HP 10" - $499 - June
- - - - HP 7" - -TBD - Sept
-----
Previously released:
- - - -iPad 2 - $499 - March 11th
- - - - -iPad - $399 - April 2010

Thoughts...
1. These would have to be WiFi only versions.
2. Motorola is the only one over $499.
3. When the Dell 10" is released at $499, the Dell 7" may drop to $399.

 

[admorris#AC]

[QUOTEI'm not saying here that Motorola couldn't choose to price aggressively to grab market share, but that wouldn't be a sustainable model for them.[/QUOTE]


Neither would not selling xooms b/c of too high a price.

 

[MazoMark]

Like it or not, Apple has a couple big advantages on pricing. First, being the monolithic 800 lb gorilla, they have huge leverage with parts suppliers to drive costs down. None of the Android tab makers are in the position to place multi-billion dollar orders for parts - Apple is. Second, Apple makes incredible margin on apps from developers. I've never seen anything on the arrangement between Google and tablet makers on sharing app margins, but I'd be willing to bet that Motorola isn't making anywhere close to the 30% cut that Apple routinely gets.

Combine those two and add in that you are trying to launch a new device into a market that Apple currently owns, and you've got to take some real risks to gain share. I don't think Motorola was able to or willing to price aggressively enough to really grab share they way they needed to make the Xoom a hit. Don't get me wrong - I think the Xoom is a great tablet and has best specs of anything on market today. But I don't think it is ever going to be the "iPad killer" it could have been. In short, I think Motorola marketing dropped the ball.

 

[jerrykur]

Second, Apple makes incredible margin on apps from developers. I've never seen anything on the arrangement between Google and tablet makers on sharing app margins, but I'd be willing to bet that Motorola isn't making anywhere close to the 30% cut that Apple routinely gets.

The Android Market is the same, 70% you -30% to the market.

For subscriptions (i.e. Magazines) Apple is worse at the same 70/30 split. Google is 90/10.

 

[milominderbinde]

...In short, I think Motorola marketing dropped the ball.

This^^

To take on the 800 pound gorilla, you have to out market them at every turn, especially price. Which should be pretty easy since Apple has not run a single iPad 2 ad yet.

But then the 800 pound gorilla had a 1200 pound kid.

The iPad 2 was thinner, lighter, insanely fast (tests, more), and worst of all kept the same base price of $499. And the iPad dropped to $399. If we all read the Wall Street Journal a month ago, Motorola knew it too.

Motorola's response was to set the WiFi only price for the Xoom at $800.

Right now, no other tablet is allowed to have Honeycomb because the Xoom is the exclusive flagship...until June.

Google has to help get the flagship off the rocks.

Google, do something.