Market Insight

Is The Motorola Xoom Priced Too High?


The tablet world is abuzz today after Motorola’s Xoom ad during yesterday’s Super Bowl. Motorola cleverly positioned itself as the outsider in a world dominated by white headphones (white headphones = Apple) in a commercial that echoed Apple’s landmark ad in the 1984 Super Bowl. The product Motorola was advertising was its new tablet – the Xoom. Unfortunately for Motorola, all that expensive advertising may be for naught – the Xoom is just too expensive.

At $800 the Xoom is priced just $30 below Apple’s most expensive iPad, and a staggering $300 above its least expensive (and most popular) iPad. If one compares the two devices with the most similar specs, the Xoom is still $70 more expensive.

 

Motorola Xoom

Apple iPad

Memory

8Gb

2Gb

Storage

32GB

32GB

Wifi

Yes

Yes

Screen

10.1

9.7

3G

Yes

Yes

Price

$800

$730


One could reasonably argue that the Xoom has a more advanced processor, a slightly bigger screen and four times the memory and therefore merits a $70 price premium. But when one considers that the most popular iPad is the $500 version then the Moto Xoom looks dramatically overpriced – 60% overpriced.

Motorola may be playing for the high end of the market but that will be a challenging corner of the market to compete in, one in which Apple has a strong presence and compelling products. Furthermore, when Apple launches the next generation iPad (likely in the next few months) the hardware specs will likely put the iPad at a level beyond the Xoom. What will be compelling about the Xoom then? The Apple iPad did a lot of things right when it was launched – it got the hardware right, it got the software right and it got the price right. It looks like Motorola got two out of three right...let’s hope it has some tricks up its sleeve.