Motorola XOOM priced at $800 • Hacker News Board

Re: Motorola XOOM priced at $800

#71

Post by radicaldreamer » Mon, Feb 07, 2011, 8:39 AM UTC

siglesias wrote: post #35

uytrhyujkujhy wrote: post #28

Earlier quoted context omitted.

So apple can buy the CPU for it's iPad from Samsung for less than Samsung can????

Actually, this is correct. In many electronics companies the divisions internally can operate as profit centers, wherein they are incentivized by making the largest profits for themselves. If Apple can offer more for flash to the Samsung flash division than the phone division at Samsung, then business goes to Apple. The numbers check out. Related readings "Using transfer pricing in decision making - Nuts and Bolts of…

Exactly. In large asian corporations which have their hands in a lot of different industries and spaces, different divisions often act and negotiate independently. This is so that no one division can bring the whole company down and other companies can maintain a level of trust with that division as a supplier, regardless of whether another division might be competing with those companies.

Failure to respect these divisions is one reason Sony failed in the consumer electronics space against the iPod. It allowed the entertainment and media side of the company to impose ATRAC copy protection and other kinds of DRM on the consumer electronics division of the company, which resulted in a much less compelling (compared to the iPod and other music players which used less draconian DRM measures) network walkman line of products.

Re: Motorola XOOM priced at $800

#72

Post by eftpotrm » Mon, Feb 07, 2011, 8:40 AM UTC

Would someone care to explain why these things still cost double what an equivalent netbook with additional parts does?

Re: Motorola XOOM priced at $800

#73

Post by ZeroGravitas » Mon, Feb 07, 2011, 8:44 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…

Since your comment boils down to "Android tablets are crap and should be priced accordingly" it's probably a good thing that they're setting expectations with a high price.

I don't see any part of your comment that doesn't apply to Android phones, and they clearly started at the high-end before they working their way down the value chain. This strategy worked well enough to save Motorola, I don't see why they should change now before your bold prediction of zero sales of their tablet offering is proved one way or the other.

Re: Motorola XOOM priced at $800

#74

Post by cubicle67 » Mon, Feb 07, 2011, 8:58 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.

my initial reaction was that this has to be an error, but now I think it may be referring to WiFi hotspot functionality.

Help me here, I'm trying hard to come up with a scenario which doesn't involve painting the people involved in well... a less than optimal light

Re: Motorola XOOM priced at $800

#75

Post by forgottenpaswrd » Mon, Feb 07, 2011, 9:13 AM UTC

schwabacher wrote: post #61

Andys wrote: post #36

Earlier quoted context omitted.

Manufacturing cost is ALL about the volume. You can make a device cost half as much if you buy 10x the volume, and half as much again for 100x

But the most expensive parts (processor, lcd, batteries, ram, flash memory) are for the most part commodity items. I would imagine Apple has some negotiating power buying huge volumes, but getting them 50-75% cheaper than Samsung?

Commodity items are not immune to mass production prices. Today Apple is the #1 flash memory user in the world thanks to the ipods,iphones and macbooks airs.

It is not only "negotiating power", it is as simple as making 10 million iPad processors make them more than 10 times less expensive than those that have not sold even a million. Having a semiconductors line(processor, LCDs...) are roughly the same fixed cost if you make 1 unit or a million.

Samsung is one of the few companies that could compete with Apple as the processor design is theirs, have great LCD and ram tech, but they have not a single product that compete with Apple in numbers.

Re: Motorola XOOM priced at $800

#76

Post by gnaffle » Mon, Feb 07, 2011, 9:22 AM UTC

jrockway wrote: post #68

schwabacher wrote: post #61

Earlier quoted context omitted.

But the most expensive parts (processor, lcd, batteries, ram, flash memory) are for the most part commodity items. I would imagine Apple has some negotiating power buying huge volumes, but getting them 50-75% cheaper than Samsung?

And remember, Samsung makes the flash memory for Apple! Surely they give themselves the same price (or better) that they give Apple. (They also make LCDs, so they probably get a good price on those too.)

Apple paid $500M in cash to Toshiba for flash memory in 2009. They invested $3.9B this year in some unspecified manufacturer, reportedly buying them manufacturing equipment and tooling. I'm pretty sure that those cash payments will enable the manufacturers to cut prices because they in turn can pay cash to their suppliers. Without the up-front cash and volume that Apple provides, even Samsung itself probably can't give themselves the same price without losing money. And if they do that, my guess is that Apple might take their business elsewhere, and for Samsung the math should be pretty easy on that one.

Re: Motorola XOOM priced at $800

#77

Post by forgottenpaswrd » Mon, Feb 07, 2011, 9:28 AM UTC

cpeterso wrote: post #59

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…

However, the Xoom has beefier (i.e. costlier) hardware than the iPad: * 1 GB vs 256 MB RAM * 1 GHz dual-core vs 1 GHz single-core processor * 10.1" 1280×800 vs 9.7" 1024x768 display * 2 cameras vs 0 * and a freakin' barometer?! But how much will these hardware improvements affect Joe Consumer's purchasing decision when he wants read Facebook and play Angry Birds?

"*and a freakin' barometer?!"

Wow, that makes it really interesting. The huge problem with GPS is height information. My GPS devices have commonly 10-15 m practical error in height on cities (urban canyon effect).

This could be very interesting for tunnel inertial navigation as makes the inertial problem a 2d issue from 3d.

Re: Motorola XOOM priced at $800

#78

Post by scrrr » Mon, Feb 07, 2011, 9:28 AM UTC

The way Motorola has handled updates for the Droid and the high price will make the Xoom flop.

Re: Motorola XOOM priced at $800

#79

Post by gnaffle » Mon, Feb 07, 2011, 9:38 AM UTC

megaman821 wrote: post #37

thatoneguy wrote: post #18

Earlier quoted context omitted.

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.

Instead of trying to copy Apple's products, their competitors should really be looking at how to replicate their marketing and supply-side management.

You're right that they should stop trying to copy Apple, and instead try to make something better. To me, Android is only more open and flexible, but it's not better. It might be good enough, though, just like Windows was good enough and more "open" than MacOS.

But without the right product, no amount of marketing is going to get you any real volume. And without volume, no amount of supply-side management is going to get the great product margins.

Re: Motorola XOOM priced at $800

#80

Post by forgottenpaswrd » Mon, Feb 07, 2011, 10:20 AM UTC

eftpotrm wrote: post #72

Would someone care to explain why these things still cost double what an equivalent netbook with additional parts does?

Netbooks use way cheaper hard disks, instead of ssd. Netbooks don't have touchscreens. Netbooks don't have GPS, accelerometers, and gyros. Netbook don't have a battery that last 9 hours.

If there is a netbook with this specs,witch they are, it is going to be as expensive as tablets.

So, there is no "equivalent netbook" with half the price. Putting a pixel qi screen to my netbook cost me $275, a touchscreen $100 plus shipping cost, plus my time, plus the risk I break my netbook(I nearly broke it when bending one of the screen connection pins).