A leaked Best Buy ad has the Motorola Xoom tablet with Android 3.0 (Honeycomb) and 32GB of storage on sale on February 24 for $799. Yikes! That is $70 more than an 32GB iPad 3G. The Xoom is equipped with a Verizon 3G radio, but it appears that a contract is not required. There is a per-month fee where the data fees are similar to other Verizon fees (1GB = $20, 3GB=$35,…) The weird part is that it says to activate Wifi you need to purchase 1 month of 3G service. I’m hoping that is a mistake. There has been no word about availability of a wifi only model.
My Take: Who would have thought that Apple would be the winner at a pricing war? The $799 price is a barrier to entry for the Xoom whether it is better than an iPad or not. True it is close in price to an 32GB iPad 3G, but an entry level iPad (16GB wifi) is only $499 and doesn’t require you to spend $30 to activate the wifi. (I’m really hoping that’s a mistake!)
I hope that other Android tablets are not sold this way. It seems to me that the better strategy is to make Honeycomb tablets more available to the masses so that the platform gains traction quickly. Removing the 3G radio would lower the price by over $100 (the iPad 3G is $129 more than the iPad wifi). Also, don’t depend upon a subsidized price with a 2 year contract to attract buyers. Requiring a 2 year data contract for a tablet will be a hard sell.
This is too bad because the Xoom looks like a very nice device and I’d like to see iPad get some real competition. Android helped make iPhone a better platform (and vice versa) and the same can happen in the tablet space. Competition is good.
You can see the ad over at BGR.com.