Motorola Faces Concern Over Xoom Pricing

Consumers are reportedly baulking at the $799 (£496) retail price of the Motorola Xoom, after Verizon Wireless and Best Buy revealed its price.

Android Central said last month the Xoom, the first computer to be based on Google’s Android 3.0 operating system tailored for tablets, would cost $799 (£496) from Verizon Wireless, sans contract.

Engadget rekindled the fire 6 February when it received a Best Buy advert, which also hawked the tablet for $799.

Pricing Concern

Moreover, it is now known that consumers will have to buy a 3G data plan to enable Wi-Fi on the Xoom, another move that could push consumers to Apple’s iPad, which offers WiFi-only and Wi-Fi+3G models. The entry level Wi-Fi model costs $499 (£310), while the most expensive iPad costs $829 (£514) for Wi-Fi+3G.

A Verizon Wireless spokesperson declined to comment on pricing for the carrier’s Xoom when asked by eWEEK 7 February. Even so, the gadget blog rumours have consumers concerned.

One reader commented to eWEEK 7 February: “Ridiculous that you have to buy a data plan to enable Wi-Fi though. Read the fine print.”

Another wrote: “The Xoom looks promising, but I don’t need/want 3G/4G. I’m not about to pay a premium when I can get the iPad for less. Make it the same as the Wi-Fi-only iPad and I’ll buy it.”

Yet another reader wrote: At $800 (£496), its DOA. Why would the masses want to pay significantly more for this device over the iPad1 (and the iPad2 will likely have similar features, and ed cheaper). Can one even write (as oppose to type) with this device?”

The sentiments appear clear: Consumers anxiously awaiting the Xoom have been treated to a great wake up call, not unlike when Verizon Wireless and AT&T launched their Samsung Galaxy Tab tablets for $599 (£371) and $649 (£402), respectively, last year.

Analyst Reaction

Analysts aren’t surprised by the outrage from prospective buyers.

“This is very aggressive pricing in the face of consumers’ clear willingness to treat Apple products as the “gold standard” and worthy of a premium, with competing products representing some kind of compromise, which is typically reflected in pricing,” Forrester Research analyst Charles Golvin told eWEEK.

Golvin’s colleague, Forrester analyst Sarah Rotman Epps, said cost and contract flexibility remain high on the list of factors for consumers mulling purchasing a tablet.

Epps said she polled 4,000 consumers in January 2011 and learned people who wanted a tablet were willing to pay $260 (£161), down from the $500 (£310) on average a consumer was willing to pay in June 2010, two months after Apple set the standard with its low-end iPad.