Motorola XOOM priced at $800 • Hacker News Board

Re: Motorola XOOM priced at $800

#11

Post by TomOfTTB » Mon, Feb 07, 2011, 1:44 AM UTC

thought_alarm wrote: post #5

... and you have to purchase a data plan before you can use WiFi. The iPad is still the only tablet in the history of personal computing that makes any sense.

Clearly some kind of deal was struck with Verizon. Since the initial Xoom press release said the WiFi version would come first and we have confirmation that it does exist (http://tinyurl.com/5wr82ge). Plus Verizon made a big deal about having it first at CES (http://tinyurl.com/28rqdvk)

My guess is Verizon gets the first Honeycomb tablet and Motorola gets a guarantee for a significant marketing push. I have no doubt there will be a WiFi only version the question is just how long it will be before we can buy it.

Re: Motorola XOOM priced at $800

#12

Post by jrockway » Mon, Feb 07, 2011, 1:52 AM UTC

Times have really changed when the knock-offs cost more than the real thing...

Someone just needs to figure out how to install Android or Chrome OS on an iPad, and it will be the tablet without any compromises.

Re: Motorola XOOM priced at $800

#13

Post by natnat » Mon, Feb 07, 2011, 2:03 AM UTC

I really don't understand this at all. According to iSuppli[1], Apple pays $229.35 in parts and labor to make the low-end iPad. They develop their own operating system, buy incredible amounts of ads, and yet they still have massive profit margins selling iPads for $500.

Meanwhile, Motorola and Samsung and other manufacturers get a free operating system and get cellphone carriers to give them a bunch of money to sell the device with a data plan. Yet their devices are $600-$1000, they often have smaller screens, and are (probably) loaded up with crapware. I fail to see why anyone would ever buy something like this, and I fail to see why anyone thinks someone will buy one.

Even if no company has a supply chain as good as Apple's (which I have trouble believing, considering how many components are manufactured by Toshiba and Samsung, for instance) and they need to pay an additional 20% for parts, they could still make the same device, sell it for slightly less and still make plenty of money.

[1] http://www.isuppli.com/Teardowns/News/Pages/Mid-RangeiPadtoG...

Re: Motorola XOOM priced at $800

#14

Post by jsz0 » Mon, Feb 07, 2011, 2:06 AM UTC

This is the practical downside of being too cozy with carriers. A cheaper wifi-only model would be great for consumers but cuts the carriers out of the loop entirely. Probably the same reason there's no 'iPod Touch killer' out there yet. All these companies are in the business of selling equipment to carriers. What the consumer wants is a secondary consideration at best.

Re: Motorola XOOM priced at $800

#15

Post by netcan » Mon, Feb 07, 2011, 2:19 AM UTC

I think the products that compete with iphones and ipads point to a fundamental shift in how Apple do things these days: Apple now compete on price.

I'm not saying they've given up on their high margins on everything policy. Like other commenters have said, they probably use purchasing power to make up the difference, but they are using price nonetheless.

We're so used to Apple being the premium option that we keep on being surprised that they aren't being beaten on price and then assume it's temporary. Well, it's several years into iphone and they aren't the macbooks off mobile phones yet. You actually need to pay for a non Apple alternative.

They still feel like the premium option though so it seems just silly to pay a $100 premium for the non-apple alternative, like paying a premium for an ipod knock-off.

It's quite a strategy. Build a company around products need to command a premium. Then remove the constraint. It's like having a runner run with stones in his pocket all his life then suddenly remove them.

Re: Motorola XOOM priced at $800

#16

Post by netcan » Mon, Feb 07, 2011, 2:25 AM UTC

natnat wrote: post #13

I really don't understand this at all. According to iSuppli[1], Apple pays $229.35 in parts and labor to make the low-end iPad. They develop their own operating system, buy incredible amounts of ads, and yet they still have massive profit margins selling iPads for $500. Meanwhile, Motorola and Samsung and other manufacturers get a free operating system and get cellphone carriers to give them a bunch of money to sell…

Must be more to it than that.

If it was possible to get a good tablet (of any size) to consumers cheaper than Apple, someone would have. Maybe this project started out with your assumptions and ended up with (possibly unsellable) $800 device.

Re: Motorola XOOM priced at $800

#17

Post by bane » Mon, Feb 07, 2011, 2:33 AM UTC

No thank you, drop the price $500, then we're talking.

Re: Motorola XOOM priced at $800

#18

Post by thatoneguy » Mon, Feb 07, 2011, 2:38 AM UTC

netcan wrote: post #16

natnat wrote: post #13

I really don't understand this at all. According to iSuppli[1], Apple pays $229.35 in parts and labor to make the low-end iPad. They develop their own operating system, buy incredible amounts of ads, and yet they still have massive profit margins selling iPads for $500. Meanwhile, Motorola and Samsung and other manufacturers get a free operating system and get cellphone carriers to give them a bunch of money to sell…

Must be more to it than that. If it was possible to get a good tablet (of any size) to consumers cheaper than Apple, someone would have. Maybe this project started out with your assumptions and ended up with (possibly unsellable) $800 device.

AFAIK, Apple's supply chain is not only legendary, but they'll commit huge amounts of capital to new hardware products in advance. This allows them to more or less own the output of a given supplier's factory, forcing other companies to pay spot prices for their follow-on products.

Re: Motorola XOOM priced at $800

#19

Post by protomyth » Mon, Feb 07, 2011, 2:38 AM UTC

natnat wrote: post #13

I really don't understand this at all. According to iSuppli[1], Apple pays $229.35 in parts and labor to make the low-end iPad. They develop their own operating system, buy incredible amounts of ads, and yet they still have massive profit margins selling iPads for $500. Meanwhile, Motorola and Samsung and other manufacturers get a free operating system and get cellphone carriers to give them a bunch of money to sell…

I am pretty sur iSuppli's numbers are not accurate. Apple has the money to buy in quantity that Mortorola cannot match. I also think that Apple's COO has overseen the building of a world-class supply chain. Plus having a successful retail chain that can feature your product is a huge advantage. The iPod experience shoul show that price is not going to be an easy thing to beat Apple in for consumer electronics.

Re: Motorola XOOM priced at $800

#20

Post by bane » Mon, Feb 07, 2011, 2:43 AM UTC

jsz0 wrote: post #14

This is the practical downside of being too cozy with carriers. A cheaper wifi-only model would be great for consumers but cuts the carriers out of the loop entirely. Probably the same reason there's no 'iPod Touch killer' out there yet. All these companies are in the business of selling equipment to carriers. What the consumer wants is a secondary consideration at best.

It's a good point. Their end-to-end supply chain assumes carriers are the end customer. I'm guessing some of the price inflation assumes some kind of subsidy from the carrier.