Is Motorola Pricing Xoom Right Out of the Market?

Feb

2011

Tim Gray, Assistant Editor
11:41 AM ET

As the iPad killer queue continues to swell, it is becoming apparent that not only is Apple’s first mover advantage in the tablet space a big obstacle for the competition, but the price point of the device is proving as difficult to cope with as consumer perception.

Now, one day after Motorola Xoom splashed onto the world stage with a clever Super Bowl ad (above) that paid homage to Apple’s famed "1984” commercial while suggesting it is the Xoom that will lead a new revolution in computing individuality, a leaked ad has the device selling for $300 more than the entry level iPad.

Motorola Xoom, the first tablet computer running Google's tablet-ready Android 3.0 (Honeycomb) operating system, is expected to go on sale Feb. 24.

Best Buy is according to a screen shot grabbed by Engadget, Best Buy will sell the device for $799.

While Xoom does have some technical advantages over the current iPad, including front- and rear-facing cameras and support for Adobe Flash, a 60 percent higher price barrier will likely be difficult to entice consumers, especially as Apple prepares to launched a beefed up iPad 2 in the coming months.

Analyst have predicted in order to take a bite out of Apple's sizable market share in the burgeoning tablet space, companies are going to have the difficult tasks of undercutting iPad’s already competitive price points, or offer some pretty serious technological advantages.

iPad prices range from $499 to $829.

“Apple hit a very competitive price point for one major reason,” Dmitriy Molchanov, an analyst with the Yankee Group, told iPadNewsDaily just before 40 new tablet computers were launched at the Consumer Electronics Show. “They use a lot of the same materials, chipsets and manufacturers for several products including the iPhone, iPod Touch and even Apple TV. So they are hitting a lot of economies of scale.”

For the most part, the iPad competitors have failed to capture the tech consumer market’s attention. However, as a group devices using Google’s Android software have been eating away at Apple’s once overwhelmingly dominant market share.

Android devices claimed an impressive 22 percent of sales in the fourth quarter, up from the 2.3 percent the previous quarter, market researcher Strategy Analytics said.

According to the report, as total tablet sales doubled globally in the fourth quarter, the iPad took the biggest percentage losss dropping market share from 96 percent to 75 percent. The loss was a direct result of an exploding number of Android enabled tablets hitting the market.

Samsung’s Galaxy Tab provided the main thrust in Android market growth. The electronics giant launched the device in dozens of countries and have been heavily promoting the slate as a smaller and smarter alternative to the iPad.