Motorola Xoom sells only 100,000 units. Whose fault is that?

I guess one of the downsides to being first-to-market with a new revision of a mobile operating system is how exposed it makes you. That's a lesson Motorola is learning, as yesterday the tech blogs were filled with the news that only about 100,000 Motorola Xoom tablets have been sold so far.

That number didn't come from Motorola (they've yet to comment) but from Deutsche Bank who came up with the number based on how many devices running Android Honeycomb were connecting to the Android Market. Since the Xoom is the only device available at retail running Honeycomb, it's safe to assume that almost all of these devices were Xooms. For more details on how this figure was arrived at, check out The Guardian's detailed breakdown.

So what does this tell us? Well it depends on if you're an Apple fan or not. If you're an Apple fan, like Jay Yarrow of Business Insider apparently is, it means the Xoom is a flop. Clearly it isn't selling nearly as fast as the Apple iPad did when it first launched (the iPad sold 300,000 units in its first day); that's hardly in dispute. I'm not sure that means it's a flop though. Few brands have the kind of loyal followers that Apple has. Cooler, more objective heads have pointed out that 100,000 units/month isn't a horrible number for a device that, outside of tech circles, didn't have an awful lot of marketing push behind it.

Also, the WiFi version of the Xoom didn't launch until the end of March, so it doesn't figure into those numbers. And as the Guardian points out, there aren't a lot of Android 3.0 apps in the Market right now. That could mean savvy consumers aren't ready to buy into Honeycomb yet. (This last fact also works to discredit the 100K figure: with no apps to download there's no reason to hit the Market, and so there could be a lot of Xooms not being counted.)

If you walk into an Apple Store today you'll see iPads everywhere, begging to be fondled and then taken home. Without making a special trip to check one out, I've yet to see a working Xoom. Yes, I've seen the tablet for sale at Staples and Best Buy, but as is typical of these kinds of stores, the units weren't working. My day-to-day meanderings don't generally take me into a Verizon store but perhaps the displays there are better.

So maybe Motorola just has the odds stacked against it. They don't have a the kind of brand loyalty Apple has, they don't have the controlled retail outlet that Apple does. On some level Apple started preparing the world for the iPad way back when it introduced the killer iTunes/iPod combo. "Oh, it just connects to iTunes? I already have that!" says the tablet-shopper considering an iPad.

That's the Android apologist's point of view.

Or maybe, as I've said again and again, Android tablets are just too darned expensive. A 3G Xoom is $800, or $600 with a two-year contract. You can get a 3G iPad 2 for $629 with no commitment. Sure you can argue that the Xoom has better hardware (that $629 is for the 16GB iPad 2) but you can also argue that iOS has a more mature environment to play in.

When it comes to WiFi models, the two tablets are much more comparably priced: $600 for the 32GB Xoom, $600 for the 32GB iPad 2, but again, that 100,000 figure essentially doesn't include WiFi models. The question is, does it makes sense to take on Apple and its incredibly loyal customer base with a "comparably priced" product? I don't think so. I think you need to entice people away from Apple by offering a better deal.

We've seen Samsung's Galaxy Tab price fall pretty consistently ever since launch (by the way, a WiFi Galaxy Tab is coming next week for $350). We'll see the Xoom price being reduced in the next month or two as well. Motorola has to cut the price or settle for having a niche product on its hands. Not only does it have Apple to compete with, it'll soon have plenty of competition from other Android tablet makers, too. Already there is some: the Xoom only gets a percentage of the sales of non-Apple tablet buyers, after all.

I've been wanting a $300 Android tablet for a while, but I'm ready to compromise. I've got $400 ear-marked for the first solid 10" Honeycomb tablet to hit the market. If Motorola is nimble enough that might mean I'll wind up with a Xoom, but it's looking more likely that the ASUS Transformer will hit that target first.

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