iPad 2 Pricing Puts Screws to Motorola Xoom
While most folks who attended or followed Apple's iPad 2 event March 2 were hungrily lapping up Apple CEO Steve Jobs' highlight reel of new features and stats, I was looking for different info: price.
How much would the iPad 2 cost? Because with all of the hand-wringing over the Motorola Xoom's $599 price point with Verizon contract, $799 without contract, I was curious to see what Apple would do to hedge against the Xoom.
And boy did it ever. The iPad 2 pricing is the same as the iPad 1 pricing, or as Jobs showed:
Jobs jabbed at Motorola and Verizon Wireless: "Now some folks are out there saying they're only a little bit more expensive than us. When you look at this matrix, five of these six are less than $799."
That, folks, was a clear shot at the Xoom, which off contract is $70 less than the 32GB iPad 1 and iPad 2, which launches March 11.
Imagine the collective cursing from Motorola and Verizon execs upon Jobs' reveal that he was undercutting them by offering similar performance and functionality to the Xoom at a lower price point.
Remember, it was Motorola Mobility CEO Sanjay Jha himself who said Motorola priced the Xoom as a premium tablet to compete with the iPad 2. With iPad 1 price points, this will be tougher than you think.
So I've been polling analyst reactions the last 24 hours. To a man and woman, every one of them believes Verizon and Motorola will have to hack their price points. I'll profile this over the weekend for eWEEK.com.
For now, I leave you with a couple thoughts. First, I'd like to see the Xoom drop to $499 on contract and $599 sans 3G deal before it will see meaningful sell-through.
Finally, stuck here in Connecticut, I didn't attend the event so I couldn't enjoy any hands-on with the iPad 2, which would have been useful after I played with the Xoom.
So I found someone who did. Enjoy this e-mail exchange I had with Current Analysis analyst Avi Greengart, who attended the launch and clearly was impressed by the iPad 2:
More expensive components or not, the Xoom needs to come down in price. Hope you got some hands-on time with the iPad 2. Everyone back East who couldn't get to the event sounded underwhelmed, but I think the next iPad might be the more appropriate measure of "magical," which iPad 2 is certainly not.
I fail to see the difference between 1.6 and 1.3 pounds as a big deal. Now the A5 chip, on the other hand, may be a big deal, particularly if the iPad hums faster than the Xoom and future dual-core tablets.
I did get hands on. The drop of 0.3 lbs. may sound insignificant, but it is noticeable. I would have liked it even lighter--handheld devices really do get measured in ounces. I didn't notice any appreciable difference in speed, though I didn't have my iPad or XOOM on hand for head-to-head comparisons. I'll do that when I get my iPad 2 review unit.
Perhaps jaded tech reporters are underwhelmed, but I expect consumers will be thrilled. Apple already had a massive lead in the consumer tablet market, which it created, and these "underwhelming" upgrades keep the company comfortably ahead.
Ouch! Don't mess with an
Apple/iPad fan analyst. Consider me burned.
Greengart responded in the comments below:
Oh, come on, Clint, "Apple/iPad fan?" I'm an analyst who has compared nearly every tablet on the market (and several that are not out yet) and my professional opinion is that Apple has a solid lead in the consumer tablet market thanks to a superior ecosystem of apps and media, along with its brand status as market leader. When it comes to Pixar, I'm a fan (actually, more "fanatic." The highlight of the last Apple event for me was meeting John Lasseter). Washington Redskins? I'm a fan ("disgruntled fan" would be more accurate at this point). Apple? There I'm just an analyst.
Well played, Avi, well played.