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Those of you disappointed that Motorola didn't seriously undercut the competition with its Xoom pricing, it turns out there's good reason they didn't. Perhaps Motorola couldn't. According to a teardown analysis by TechInsights, the estimated bill of materials (BOM) on the Xoom comes to $278. That's $33 more than Apple's iPad, which carries an estimated BOM of $245 for its 3G, 32GB model, The Wall Street Journal reports.
Going with a larger 10-inch, 1280x800 screen only added $5 to the Xoom's bottom line. Instead, the 5MP rear- and 2MP front-facing cameras ended up being the most costly additions, which added $14 to the tablet. Motorola chose to price its Xoom 3G at $799 (sans contract), while a similarly equipped iPad runs $729.
At least one analyst, and probably several consumers, thinks Motorola made a mistake by not releasing a feature stripped version to go head-to-head with Apple's $499 16GB Wi-Fi iPad.
"We do think it will hurt them," said Susan Kevorkian, an analyst at IDC. "Device makers who would otherwise have a good shot at this market are effectively pricing themselves out of it from the get-go."
How much would you be willing to pay for a tablet?
Comments are closed on this article
aviaggio
March 02, 2011 at 9:59am
I refuse to believe they couldn't price it at $500-$550 and still make a profit. Most computer parts run a much smaller margin and no one complains.
Let's face it, they're going with the smartphone model of pricing instead of the computer model of pricing, which I really think is going to bite them on the ass. Most people will not pay $800 for what's essentially a toy.
fullur
March 02, 2011 at 9:18am
$278 is $33 more than $235? Try $43.
I was actually thinking about Xoom until I heard it was going to be MORE than the iPad. Ridiculous! When has Apple ever been a price leader? It's time for the competition to show up.
