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Motorola XOOM Parts Priced Out, Just Slightly More Expensive than the iPad

It’s pretty hard for anyone to argue that the Motorola XOOM is not an incredible product, but that hasn’t stopped the onslaught of angry would-be customers over its $799 premium price tag.  And thanks to the WSJ, we can see the exact breakdown for the pricing of each component and how it compares similarly to that of the original iPad.  The numbers are definitely close even with a bigger/better screen, dual-core processor and 2 different cameras, but it’s hard to forget the fact that the iPad2 is going to be announced tomorrow and will have newer parts than the original at roughly the same cost.  They’ll also likely introduce a cheap WiFi-only version which will appeal and sell to an enormous market, while Sanjay and the boys spend time twiddling their thumbs over when to release theirs.

Via:  WSJ

Cheers timoh!

  • Sathyap113

    Motorola  Xoom Parts Here
     http://bit.ly/FixationPC  

  • Vco

    I got to play with it and can safely say I love it, but love will have to wait bc there is no way I will pay $799, I am android all the way and have put my love on pause until the price is way less ridiculous

  • http://twitter.com/deadly_v2 Jeff Stewart

    Its crazy because my verizon store actually still pays 799.99 for the xoom. We make NO money off the xoom at all.

  • http://www.couponcodes4u.com coupon codes

    The regular customer thinks the iPad is enhanced, and the majority is not going to give additional for what they distinguish to be a lesser manufactured goods.

  • Anonymous

    Well, I believe the Xoom beats the first-generation iPad in certain respects, but I will stick with the iPad and believe the iPad 2 will do much better!
    If the Xoom is slightly more expensive than the iPad, I don’t think it will earn much customers, And what’s more the most expected for flash support still are not actually have anything of the sort, I believe Apple could make Flash work if it wanted to, and even work great!
    So why not as well buy an iPad then, the iPad is coming tomorrow:
    http://www.ifunia.com/news/leaked-photos-of-the-upcoming-ipad-2

  • Born

    I want to preface by saying I just got rid of my Droid (OG) for an iPhone, on Verizon. I’ve been watching this site for over a year now and have to say you are a great source of information Kellex (great job). I bought back last November. I have no issues with the Droid in its idea. I liked the device for over a year, like I said. But I never really looked at the iPhone or the devices by Apple. So I really had no evidence to bash as much as everyone does here. I do agree, everyone can have an opinion, but a lot of people here hate the Apple products a lot.

    Now, keeping in mind that many of you are power users, I can see how the Apple closed format would be frustrating and Android would be great for that use. (I don’t use it for that so I have different priorities). I switched for 3 major reasons.
    1) Frustration – Frustration with the Android market being flooded. If I have to buy a phone I don’t want an upgrade every 3 months. Its not financially feasible. I’m sure many of you know this as you are shopping it can be a it overwhelming. I would like a company to put out a phone and focus on it and update it and not do the big mystery game as to what is going on. This is a nice plus to the Apple 1 year rotation.
    2) The constant sub par, half baked releases of some of the finest products. I think the Xoom is a perfect example of how to suck you in with “promises” and charge you out the nose. Many of you will argue this. I will argue that having seen what many of you have written about your experiences with Moto and Samsung, I would be ultra cautious. I was looking very closely at the Xoom but I have to agree with the other guy who wrote how it is being compared to a almost one year old product and still doesn’t measure up on smoothness and overall offering. Unless you need a camera.
    3) This will probably not be a big deal to most of you, but I hate how Android still “hiccups” and isn’t “smooth” in transitions. I feel that these products should come out of the box honed and ready for your abuse. Now maybe its my high expectations for the product or for Android, but that was a big deal to me with the Droid. I OC’d, rooted, broke down and flashed that thing to hell and still couldn’t get it where I wanted. This soiled my experience. Yes, there is better now, the Galaxy S is decent when OC’d. But why should I “have” to break my Terms and Conditions and my phone to get a phone close to the smooth experience of iOS.

    I do appreciate your comments because many of you make great points and have shared some great information as I went forward in this process. Many of you will hate my points, but I just wanted to say hello and point out some reasons I bought my iPhone and see how you all think the Android will be able to keep up in the future…

    • Anonymous

      Thank you for not being scared to share your thoughts. It’s refreshing to hear an opposite opinion.

  • Jroc869

    Here is what i know, if moto wants to compete they better come with something priced around 399 wifi only if the rumors of a 399 ipad wifi only unit.

    • Anonymous

      Apple rumors rarely turn out to be true.

  • Anonymous

    I don’t know if we should get too worried about iPad 2 — there are reports that this update will just be a small refresh (add cameras, small speed bump, etc.) to stay more competitive with newer tablets like the Xoom, and then iPad 3 will come later this year as a more revolutionary release.

  • Anonymous

    Now, let’s look back at Jha’s reasoning for such a hefty price tag: it can access 4g. Sorry $500 markup to access 4g not worth it.

    • Anonymous

      If you send it in for 4G that is.

  • Tonysoostupid

    thats pretty cheap. where can i get the parts and put it together myself?

    • Anonymous

      You would have to buy them in bulk to get that sort of price.

  • http://www.facebook.com/profile.php?id=510315368 Patrick Chaffin

    I fully understand the fact that the parts alone do not make up the price. A music cd costs a couple cents to manufacture but the cost to record that album can be thousands of dollars. Same concept here. Doesn’t change the fact that I, like many people, are waiting (im)patiently for a WiFi only model that will hopefully knock a couple hundred bucks off the retail price.

    I still cannot fathom why they didn’t go with multiple skus. It makes absolutely no sense from Moto’s stand point so I’m going to have to blame Verizon I guess.

  • Anonymous

    i understand the point is to make a profit.. but youd make a higher profit if you sold it cheaper because so many more people would buy it..

    • http://twitter.com/TheTechChat TheTechChat

      Okay, technically speaking, you’d make more profit, not a “higher profit,” since that really means percentage. But, I hear what you’re saying. I’m sure prices will come down when there’s more (Honeycomb) competition, and at some point Motorola will want to break out of the early adopter market and try to get some mainstream sales. For now, though, getting some margin probably makes some sense.

  • Ffred316

    i think the xoom looks really good but the price its just crazy , no one is gonna pay 799 for a tablet , thats the price of a laptop for gods sake , i`l rather just wait for the ipad two i hate to say it but they probably gonna have a better price

  • Uplink
    • http://twitter.com/TheTechChat TheTechChat

      How can we vote for things that don’t exist? The only product that actually exists from your list is the Xoom. The others aren’t real until they can actually be purchased.

  • Raf

    I just did a back of the envelope analysis and the mark up on the unsubsidized iPad and the XOOM are proportionately about the same. For the iPad there is a 66% mark-up based on the ration of the cost of the parts and the unsubsidized plan, while in the case of the XOOM it is 65%.

    As The Donger said, the teardowns don’t cover intangibles like time, money, and man hours. Additionally how the heck do you think Apple and Motorola can come with new and improved operating systems?

  • Raf

    I just did a back of the envelope analysis and the mark up on the unsubsidized iPad and the XOOM are proportionately about the same. For the iPad there is a 66% mark-up based on the ration of the cost of the parts and the unsubsidized plan, while in the case of the XOOM it is 65%.

    As The Donger said, the teardowns don’t cover intangibles like time, money, and man hours. Additionally how the heck do you think Apple and Motorola can come with new and improved operating systems?

    • Raf

      I forgot to add that that other company gets slighlty lower prices because it was able to get sweet deals with producers and parts maker. Therefore, Motorola is making a little less money proportionately per unit than its competitor.

    • Raf

      I forgot to add that that other company gets slighlty lower prices because it was able to get sweet deals with producers and parts maker. Therefore, Motorola is making a little less money proportionately per unit than its competitor.

    • http://twitter.com/TheTechChat TheTechChat

      Gonna get technical and say that it’s not a 65% “markup,” but rather a 65% margin of some sort (i.e., $800 isn’t a 65% markup from $278, it’s a lot more than that). And it’s not clear from these numbers whether this is actual cost of goods sold (which would include not only component costs but also manufacturing labor, shipping, etc.). But, bottom line is: Motorola’s pricing this at the same margin level as Apple.

      And yes, no matter what this doesn’t include overhead like non-manufacturing labor, facilities, R&D, etc., etc.

  • Ricom

    So, the costs of the components for the XOOM is 9.56% more expensive than the cost for the ipad. And the retail price for the XOOM is 9.60% more expensive than the cost for the ipad. So, they are using the same price model… so nobody should be too upset.

  • http://pulse.yahoo.com/_22DTJNMBK7MBGO36GLLWXRMR7M Riz

    iPad should of come out at the sweetspot price of $199 and $299, would of sold 10 times as many easily. Apple makes 30 cents on the dollar for apps, they would of made more money in the long run this way. Instead they came out with the ridiculously high price for such low tech and so far, has poisoned the pricing of other tabs.

    Now moto should of came out with the far superior Xoom at $399 and they would be dominating sales right now. They will learn soon enough and thankfully all the other Android Tabs coming will certainly drop the pricing down for android tabs. iPad can do what they want, I don’t care.. and honestly the shift is happening and soon apple’s 10 year reign will be over. There simply is no stopping what google has created and this next 10 years will be all google and android just watch! Ask Rovio about FREE and Angry Birds, it is the future.

  • http://pulse.yahoo.com/_22DTJNMBK7MBGO36GLLWXRMR7M Riz

    iPad should of come out at the sweetspot price of $199 and $299, would of sold 10 times as many easily. Apple makes 30 cents on the dollar for apps, they would of made more money in the long run this way. Instead they came out with the ridiculously high price for such low tech and so far, has poisoned the pricing of other tabs.

    Now moto should of came out with the far superior Xoom at $399 and they would be dominating sales right now. They will learn soon enough and thankfully all the other Android Tabs coming will certainly drop the pricing down for android tabs. iPad can do what they want, I don’t care.. and honestly the shift is happening and soon apple’s 10 year reign will be over. There simply is no stopping what google has created and this next 10 years will be all google and android just watch! Ask Rovio about FREE and Angry Birds, it is the future.

    • http://twitter.com/TheTechChat TheTechChat

      You make a valid point about how Apple could price their products lower because they’ll sell apps, music, ebooks, and such over the long term. Thing is, though, Apple hasn’t had to do that because there’s been no real competition to the iPad. So, they priced things perfectly–enough to get millions of people to buy them, and still make a huge margin. Hence their great profitability and skyrocketing share price.

      Motorola doesn’t have that luxury, of course. They sell a Xoom, that’s all the revenue they’re going to get from it (barring accessories, of course). So, to be as profitable as Apple (which they’re not, of course), they’d have to sell at a higher price. Which they won’t for long, because they can’t and compete.

      Android will become the Windows of mobile, with many manufacturers making hundreds of devices, and they’ll saturate the market just like they’re doing in phones. Apple will become a niche company again just like they are in PCs, because there’s no way they can sell fewer products at equivalent margins against stronger competition and maintain their market share.

      • http://pulse.yahoo.com/_22DTJNMBK7MBGO36GLLWXRMR7M Riz

        I do realize moto does not reap the app rewards but their pricing is that of a pretty awesome laptop. Pricing for android tabs will certainly come down as competitors try and compete for sales.

        Really the technology I am hoping hits mainstream and eventually cheap is the moto lapdocks and hopefully tabdocks. My soon to be Bionic, with it’s 4g and dual cores etc is certainly enough to power they dumbdocks. No need for both if you can have one that is BOTH! but your data stays with you and again, once I see the dumb docks come way down in pricing

  • Boston

    Here is my 278.00.
    Send me all the parts, I will assemble my Xoom myself – Thank You

  • Boston

    Here is my 278.00.
    Send me all the parts, I will assemble my Xoom myself – Thank You

    • Anonymous

      Have fun designing the schematic and manufacturing the case.

      • http://twitter.com/TheTechChat TheTechChat

        Yes, of course. And, hire an HR department, marketing department, sales department, legal and regulatory department, accounting department, build headquarters and other buildings, build and equip R&D labs, pay taxes, etc., etc., etc. And THEN he’ll have a Xoom of his very own.

        • Anonymous

          To be fair, he doesn’t need most of that to build a Xoom for himself. My point was that even without all those costs, he would invest way more than $287 and $800 to make a Xoom.

      • Boston

        Really?

    • http://twitter.com/Skitz_Marz Alex Gandero

      the rest of the price is for the development of the OS and how efficient they can get it to run.

      • Anonymous

        Google gives the OS away for free, but nice try.

      • http://twitter.com/TheTechChat TheTechChat

        Actually, the $278 either covers just the components, or the components + labor and other manufacturing costs. It’s not clear from the article.

        However, it’s not just development of the OS and such that the rest covers, it’s facilities, non-manufacturing labor, regulations, R&D, taxes, etc. In other words, this is at most their gross margin, and there are hundreds of dollars in other costs that they also need to cover.

        • http://twitter.com/starnovsky Stan Tarnovsky

          Most likely just raw components. Added cost will be labor, shipping, retail, support, advertisement. It’s a substantial cost, but it’s definitely less than $500 per tablet. And most of these costs are not fixed i.e. they don’t add up with every tablet.

      • http://twitter.com/starnovsky Stan Tarnovsky

        Motorola didn’t develop Honeycomb and I doubt they contributed much to Tegra 2 optimization of it

  • http://twitter.com/TheTechChat TheTechChat

    Actually, in terms of gross margin (the only terms that really matter to a profit-seeking company), this is just about right. The Xoom comes out to a 65% gross margin, and the iPad comes out to a 66% gross margin.

    Sure, Motorola could elect to lower their gross margins in order to sell more units, but then again the Xoom is the first and only Honeycomb tablet on the market. They’re probably selling just as many units as they expected to the earliest adopters, who are typically willing to spend extra to get stuff first. Why give up margins if they don’t have to? Also, component prices might be higher while companies like Nvidia ramp up production, and so it’s possible that prices will come down as more units hit the market.

    All’s good here, folks. Nothing controversial at all, really, if you look at this from a business perspective.

    • http://pharaohtechblog.blogspot.com/ Conan Kudo (ニール・ゴンパ)

      The problem is that prices rarely come down for products in the wireless industry. So we’ll likely never see lower pricing as more units hit the market. Economies of scale don’t seem to benefit the consumer too much in the wireless industry….

  • Beng8686

    The pricetag doesn’t bother me at all… its not releasing a wifi only version first that really pisses me off. If anyone is being greedy here it would be the bloodsucking carriers. Screw android tabs until they can release something that is wifi only. VW will not get anymore of my money.

  • Anonymous

    Here’s what stands out to me. Apple charges $100 more for the 32GB iPad versus the 16GB iPad. However, the NAND flash costs $30. Let’s assume 16GB NAND flash costs $15. That’s $85 more profit for exactly the same device with more memory. The XOOM price will never be confused for economical, but Moto has a long way to go before it fleeces its customers the way Apple does.

  • http://www.facebook.com/people/Dan-Carter/500179789 Dan Carter

    My favorite part: that flash memory costs 30 bucks. And Apple charges your $100 bucks for 16 more gigs on your iPhone. Nice! Probably costs them 10 bucks more.

    • http://www.facebook.com/rob.janowski Rob Janowski

      I was just about to comment on that.

    • http://twitter.com/TheTechChat TheTechChat

      Yes, but, that’s just about right. Gross margins in the tech industry run around 65%. So, a $30 increase in costs should bring about a $100 increase in price. Do the math: $100 – $30 = $70 gross margin, or 70%. Yeah, it’s a bit high, but nothing extravagant.

    • http://twitter.com/TheTechChat TheTechChat

      Yes, but, that’s just about right. Gross margins in the tech industry run around 65%. So, a $30 increase in costs should bring about a $100 increase in price. Do the math: $100 – $30 = $70 gross margin, or 70%. Yeah, it’s a bit high, but nothing extravagant.

  • Anonymous

    Just wondering if there’s Android tablet-native third-party apps already on the market. I’ve not seen a single article or coverage on one.

    • Padrick77

      There are a few games as shown in the tegra thread. CNN, USA Today, and Pulse have an great apps on the Xoom. AccuWeather has a cool app and widget for the tablet as well. The apps are coming it is going to take time for them all to be updated to take advantage of 3.0.

  • Jeremy

    If you want to blame anyone for the Xoom’s and most future tablets pricing then blame Apple. The Ipad was out first and thus created a price point. If Motorola put the Xoom out first at a price at say $500 then the Ipad’s following release wouldn’t be $700 since it wouldn’t sell but for the same reason they wouldn’t release it at $300 which would create a price war and suck all profits from the companies as they keep lowering the prices. Plus as it was said, the cost to build the units are $280 but you can’t forget the labor hours into the unit and the software development. Nothing comes free or cheap….

  • Dr. Asterisk

    All I got out of this was that you didn’t put retarded asterisks in the Apple product names. Good for you — you grew up. @ K*llex

    • Anonymous

      I agree. That’s just childish. It makes the Android community look bad. It’s good that we can all grow up.

    • Anonymous

      I disagree 100%, I think the asterisks are hilarious. If you can’t take a light-hearted joke for what it is, you’ve got issues that no phone or tablet will ever solve. Well, maybe Prozac tablets would help.

      • Dr. Asterisk

        Yeah maybe it was funny the first few times. However, Apple makes a solid product and so does Google. I have issues that no phone or tablet will ever solve? Sounds like you live in a box where the all mighty electronic tool controls life as we know it. Go outside and be productive, ride a bike. Its okay; there was life before cell phones.

        • http://pulse.yahoo.com/_IRXQUPRGYT353VRYHBW35SFHBM dustin

          go outside and be productive? you created a sign-in just to troll and complain about asterisks…

        • DBK

          I agree with dustin. You’re a douche. Now GTFO.

      • Dr. Asterisk

        Yeah maybe it was funny the first few times. However, Apple makes a solid product and so does Google. I have issues that no phone or tablet will ever solve? Sounds like you live in a box where the all mighty electronic tool controls life as we know it. Go outside and be productive, ride a bike. Its okay; there was life before cell phones.

    • Anonymous

      I’ve ranted about the asterisk as well and I am glad to see its absence.

  • Anonymous

    People who whine about the cost of a tablet vs. how much the components cost is a neanderthalic idiot.

    The costs incurred by the manufacturer, the supplier and the retailer at every step along the supply chain route are built into the final cost of the tablet plus whatever profit margins each middleman thinks they can make along the way.

    Such is the way of things. Personally, I feel like I got a hell of a deal on my xoom.

  • DroidzFX

    fake!!!gay!! asdfa!!!!thats not even real!!

  • Noble Four

    So the Xoom costs $33 more to make, and costs $70 more retail. What’s the BFD? It’s newer, better, and packed with more awesome.

    • Anonymous

      Pretty much my thoughts exactly.

      • Anonymous

        The problem is that your average consumer doesn’t understand or care about stuff like dual core processors. The average consumer thinks the iPad is better, and most are not going to pay extra for what they perceive to be a lessor product.

        • Anonymous

          I personally don’t care what the average consumer thinks. I have the XOOM, and I love it.

        • Noble Four

          The average consumer who thinks the iPad is better is stupid, and would think the iPad is better even if the Xoom granted three wishes, which you could use to wish for an iPad (see what I did there?) We aren’t discussing what the average consumer thinks, we are informed consumers, and the thing here is to see if the price is ACTUALLY justified–not if some know nothing person who walks into Best Buy thinks it is.

          Yes, it is important that the average consumer feels like the price is justified because it drives sales, but again, as I said, we are talking about if it is actually justified. And also, I don’t mean to shoot down the average consumer–I understand not everyone is as devoted to tech as we are. But chances are, people who come this site are not average consumers, thus, our discussion need not incorporate them.

          • Anonymous

            The point is that you’re also paying for (buying into) the ecosystem. Right now, the Android 3.0 ecosystem is extremely weak and undermines the high price of the Xoom. Therefore, the price is not justified for the first device. Remember the iPad launched with only the Wifi model and the 3G model came months later after the ecosystem was built up around the $500 device helping to justify the higher price.

          • Noble Four

            You made all of that up.

          • Anonymous

            I used logic to figure it out.

          • Noble Four

            You made all of that up.

          • The Xoom is

            That’s just a faulty argument. If your argument were true no one should have purchase an iPhone when it came out or and Android, and WebOS will never do anything, etc. . . we would all be using Windows CE. . .

            Pure FUD!

            Honeycomb has a full browser that can utilize all web apps = thousands! It can use Chrome web apps = 3K+
            It can use Chrome extension 10k+
            Everything you need to be productive is already usable for Honeycomb and great games are coming that are for Tegra 2 only–straight form the PC/consoles. . . and the phone apps generally work fine–this isn’t iOS, apps scale properly in Android!

            Your comment is typical Apple FUD!!! Nothing more!

          • Anonymous

            You have have no idea what you are talking about.

            When the iPhone came out, it did not have an app ecosystem and neither did Microsoft, Nokia or RIM.

            When the iPhone finally did get its app store, it was already established. After Apple’s success came all the “me too” OSes, Android, webOS and Windows Phone which have all sold quite poorly in their first year. Android is the only one that has gained momentum since then with the release of high-profile devices like the OG Droid, EVO and Galaxy S. And now it is starting all over with tablets.

            Btw, Xoom has a browser just like the iPad and Galaxy Tab and it cannot use Chrome Web Apps or Chrome Extensions so stop spreading lies.

            Have fun with your buyers remorse.

            P.S. I’m probably buying a Xoom tomorrow unless Apple announces a $400 iPad in which case I’ll wait for the Xoom’s price to drop.

    • http://AndroidTaskForce.com Chris Gustafson

      And a free (To the consumer) LTE Radio coming soon.

      I agree with the pricing. And as long as a WiFi only Xoom comes along everybody is happy. (Except the trolls/cheapasses)

    • http://AndroidTaskForce.com Chris Gustafson

      And a free (To the consumer) LTE Radio coming soon.

      I agree with the pricing. And as long as a WiFi only Xoom comes along everybody is happy. (Except the trolls/cheapasses)

    • http://twitter.com/starnovsky Stan Tarnovsky

      Xoom is priced in line with iPad, true. But both are seriously overpriced. Well, market correction is coming this summer/fall.

    • Michael Scrip

      “What’s the BFD? It’s newer, better, and packed with more awesome.”

      I think the problem is… Motorola spent million and millions of dollars on the Superbowl commercial to show that iPad users are mindless sheeps…

      But the truth is… more people will be tempted by the $499 starting price of the iPad.

      Motorola could have made something at $499… but they chose not to. History will judge them on this decision…

  • http://www.twitter.com/slinky317 slinky317

    So just Motorola being greedy. Got it.

    • The Xoom is solid

      Really? Are you really just that clueless or do you think only Apple should be able to make a profit?

      • http://www.twitter.com/slinky317 slinky317

        Actually, I think that if Motorola had sold it at a lower price, they would have sold MORE units and thus made MORE profit.

        Instead, Motorola believed that people would go ga-ga over this and buy it at any price. So they released a tablet with unfinished features priced higher than anything else in the market with no cheaper tiered alternatives.

        • DBK

          The profit they would have made would only be marginally higher then what they did make (considering all the costs and fees that went into the Xoom). Business-wise, that would not have been considered a significant enough of a difference to make that kind of a decision. It sucks for us, but it’s understandable.

          • http://www.twitter.com/slinky317 slinky317

            What costs and fees are you talking about? I’d like to see the actual numbers that you’re referring to here.

          • DBK

            Didn’t think I had to explain this, but:

            - The costs for the parts and assembly
            - The costs for the software and it’s installation
            - The costs for selling it through particular companies or stores.
            - The costs for getting it licensed and approved
            - The taxes for all those costs

            They have to pay, too. And the price point we get is the minimum they can sell it at and still make up those costs and make some sort of profit. That is business. It sucks, and I don’t like it, but that’s how it is and it’s understandable.

          • http://www.twitter.com/slinky317 slinky317

            I understand what costs go into making/selling a product. However, you are the one that made the claim that their profit margins are low, so I asked for actual numbers which you still haven’t been able to provide.

            Apple incurs all of those same costs and is still managing to sell the original iPad for $399 right now, and the original 32gb 3G version for $629. The new iPad 2 3G 32gb version, with the dual-core CPU, is running at $729.

  • Anonymous

    So… Why are they charging so much more? F**king ridiculous!!

    • Carlito Pr787

      So much more? Cheap ass

    • Anonymous

      Bigger/better screen, dual-cameras, and a dual-core processor.

    • http://www.facebook.com/rob.janowski Rob Janowski

      lol, really?

    • Anonymous

      Because it has Android Honeycomb. You can’t put a price on love. (OK, you can put a price on love: $799).

  • TheDonger

    In before the trolls. Motorola is not here for charity but for profit. Also these tear downs never figure in the time, money, man hours, and marketing sunk into a product. Hell sure a 3M sponge is prob a few cents to manufacture but they mark it up to $2 to recoup/make a profit.

    • Anonymous

      Thank you. Someone gets it. Anyone who thinks otherwise doesn’t understand business or profits

      Also, does this factor in the LTE radio? Its quite expensive in case no one knew it. They most likely put this price tag so they can offer a “free LTE upgrade”. I mean which sounds better; higher retail price with a “free” upgrade, or lower retail price and charge you for the upgrade? The latter would surely anger many people.

      • hkklife

        A FAR better plan would have been the following:

        -Launch the wi-fi Xoom SKUs first (on Feb24th ) in 16Gb ($499) and 32Gb ($599) configs. Omit the rear camera if necessary to hit the $500 price.
        -Skip 3G and the “mail in for an upgrade” entirely and launch an LTE 4G Xoom that’s ready to go right away through Verizon in the April/May timeframe at a $50 to $100 premium over the wi-fi versions. Then you have a Xoom flavor at the $500, $600, $700, and $800 pricepoints. Everyone wins. Or if that is too many SKUs, just have a 16Gb $500 wi-fi model and the $800 32Gb WWAN version.

        While I still think the Xoom is slightly overpriced given its specs and due to the lack of a robust ecosystem and many tablet-ready Android apps, that’s not my main gripe. My HUGE beef is with Moto bending over and letting VZW push them around instead of emulating Apple and launching wi-fi versions first. Their inability to hit the cruical $500 pricepoint is also incredibly arrogant and short-sighted.

        Also, what real software development-related costs does Moto have? No Blur on this one! Other than working on getting the drivers polished, isn’t most of the heavy lifting being done by Nvidia and Google since it’s a Google Experience device?

        • Anonymous

          That actually makes a whole lot of sense. Surprised no one at Motorola/Google/Verizon thought of something so simple. You bring some really valid points to the table. I wish they had someone like you in marketing to put some common sense into their heads.

        • Anonymous

          None of the software is done by moto. Since its the android developer device all that work is done by Google.

        • Anonymous

          I think you are right on. As for the OP “it’s not charity”, no kidding, why am I going to pay that much in charity to Moto for that device. I, like many, won’t go over $500, maybe $600, for what is truly a non-essential device since it can’t yet replace my laptop. So if that means WiFi only, then that’s what they need to do to be competitive. IMO.

    • Anonymous

      Agreed, don’t forget they also have to fuel up those sweet corporate jets so Sanjay can travel the world and make promises he won’t keep:

      http://www.airliners.net/search/photo.search?regsearch=N158M
      http://www.airliners.net/search/photo.search?regsearch=N550M

    • new_to_boston

      No one could agree with you more strongly than I do about companies’ right to charge whatever they want/can for their products. But in this case, all I know is the following: I’m an Android fan, I really want a tablet, I was underwhelmed with the Xoom experience after trying out a buddy’s, and, given the price differential and based on what we hear out of you-know-who tomorrow, I’m probably going iPad for now. And that’s the flip side of the fact that companies can charge what they want (and also the beauty of a free market): customers get to choose too. I wouldn’t do anything other than the simplest wifi-only unit while I wait for the Droid/LTE world to get its collective act in gear. But still, it’s a sad moment for me.

      • The Xoom is solid

        you clearly are not an Android fan. . . nice try though ;)
        I’m sure someone out there might have believed you.

        Having actually used a Xoom I can state that there is no comparison between the Xoom and the current iPad–the Xoom wins in every area except apps in the market but the Xoom can use all the web apps and tons of market apps are coming include console/PC games and Android phone apps scale properly on the Xoom if developed right since Android 1.6 unlike the iPad’s 2x pixelated scaling. And Honeycomb blows iOS away!

        • http://www.facebook.com/strivearth Zen Strive

          iPad’s 2x pixelated scaling?
          bwahahahahahaha, now it’s even hilarious