Engadget got their hands on a Best Buy ad that although has a couple of spelling errors and the tablet looks more like a 16:9 ratio than 16:10 (too long), it shows a $799 price tag for the Motorola Xoom tablet, along with a mention of the data plans that start at $20 per month for 1 GB and up to $80 for 10 GB. Even though the ad might look a bit fake, I think it may be real because we’ve heard rumors of a $800 price before, and we’ve never heard Motorola come out and denying it, especially since they knew this could affect Xoom’s launch if it got out of hand.
Well, now it did, and everyone is outraged by the price, and we still haven’t heard anything from Motorola, which means it’s true, and either they keep it, or they are considering lowering it by the time they announce it themselves before launch. But if they decide to keep that price, then it might be the worst decision Motorola has made in the past years.
Some people may point out the features of Xoom compared to a high-end iPad and say the price is fair. I have 2 problems with this. First of all, even if the price seems fair compared to the specs it has inside and what the iPad has, you have to remember that iPad 1 is almost a year old, and iPad 2 will probably have similar specs. I have no doubt that iPad 2 will eliminate what they don’t consider important (for example the back camera, or a barometer), but they usually know what to eliminate so most people won’t care. The iPad 1 sold pretty well, even though everyone in tech was crying over lack of front-camera.
Now, even if Xoom will still seem fair priced considering the specs it has, that still doesn’t change the fact that its price is well over how much a tablet should cost. Clearly, a tablet should cost $500 or less, because the wi-fi only version, was the most sold version by far in the iPad line up. So the real question is, why is Motorola shooting themselves in the foot and cutting themselves out of the most popular market for these devices, and making Xoom a niche premium product that won’t sell very well? I find that very short sigheted of them.
Another thing that seems short sighted, is not offering a basic $500 version that is wi-fi only, the same as Apple. I’m sure Verizon had a big role in this, because they think they can capture and lock in customers with tablets on 2 year contracts, the same way they are doing with phones. But they are wrong. The vast majority of people buying tablets, will only use tablets the same way they’ve used laptops so far – at home, and ocasionally bring the tablets with them to other places, or at work. In all these cases there’s a very high chance they have Wi-Fi access.
3G access is not needed in most cases, and people won’t want to be locked in in a 2 year contract with tablets, and pay yet another data plan, besides their smartphone. If anything, they can just tether the tablet to the phone.
Bottomline is that Motorola shouldn’t have accepted this deal with Verizon, and they would’ve been much better off if they made several cheaper versions as well, with wi-fi only, too, and sell them through regular retail channels, and through Amazon.