Motorola Xoom Tablet`s $800 Cost: 10 Reasons It`s Overpriced

Some leaked promotional images from Best Buy of the upcoming and highly anticipated Motorola Xoom tablet indicate that the device will go on sale for $800 when it hits store shelves on Feb. 24. For its part, Motorola hasn't confirmed the rumor, but considering that the chances of the Xoom being quite expensive are high, most believe the $800 price tag is accurate.

If it is, Motorola might have some trouble on its hands. The technology company is undoubtedly popular right now, thanks to its many outstanding smartphones, like the Droid X, but at $800, the Xoom could price itself out of the market. The device is an unknown quantity right now, and consumers might not know for sure if it's worth such a price. The better move for Motorola would be to offer a cheaper Xoom to spur demand for its product.

Read on to find out why:

1. It's only beating the top-of-the-line iPad

Right now, Apple's iPad holds a dominant share of the tablet market. In fact, recent reports suggest the device had over 87 percent market share at the end of the third quarter of 2010. With such dominant share, Motorola must always be concerned about Apple and its tablet. But by pricing the Xoom at $800, it doesn't seem to doing that. Currently, Apple is selling its iPad for as little as $500 and as much as $829. That means that just one of the six iPad models is more expensive than the Xoom. The most comparably equipped iPad is $70 cheaper than the Xoom. That's a problem for Motorola. At $800, it could find its tablet just stalls coming out of the gate.

2. It puts it dangerously close to lightweight PCs

Tablets are made to be mobile companions for consumers and enterprise customers who want to do more while they're on-the-go. That means that tablets must compete with lightweight notebooks. The only problem is, at $800, the Xoom will be in the same ballpark with those mobile PCs. That will result in the tablet competing with both other tablets and lightweight PCs. Being sandwiched between two established product categories is never a good idea, and yet, that's where Motorola finds its Xoom.

3. Apple can get away with it, but not Motorola

Apple can get away with selling a device for $829, simply because it's one of the most recognized and respected companies in the world. But Motorola isn't Apple and chances are, it never will be. Realizing that, Motorola can't come too close to iPad pricing. Offering its Xoom tablet for $800 won't help its cause.

4. The hardware is unproven

On paper, the Motorola Xoom looks to be an outstanding alternative to the iPad. It comes with two cameras, a 10.1-inch display and an appealing design. But it's still unproven. And consumers won't know out of the box if the device will hold up to the same use that the iPad accommodates. Simply put, the Xoom is an absolute unknown to consumers right now. And plunking down $800 for such an unknown might not be something that many customers will want to do.

Next: Xoom Has to Compete with Other Android Devices >>