Motorola Xoom Costs $359 in Materials, Close to iPad: IHS iSuppli

Motorola's Xoom tablet costs approximately $359 in materials, according to a teardown by IHS iSuppli, a little bit more than the midlevel iPad.

Motorola's Xoom tablet costs the manufacturer approximately $359.92 in materials, according to a new teardown by analysis firm IHS iSuppli. That brings the device roughly in line with archrival iPad, whose 32GB model with 3G capability costs Apple about $320 to build.

"With its features and functionality, the Xoom is clearly designed to go head-to-head against the iPad 3G," Wayne Lam, an analyst with IHS iSuppli, wrote in a March 1 research note. "In pursuing that design philosophy, Motorola has closely lined up the Xoom's component costs with that of the iPad's, especially where it counts: in the touch screen, the display and the cellular radio."

The Xoom features a 10.1-inch display, 32GB of memory, a dual-core processor for faster software loading, and front and rear cameras. The Xoom retails for $799 without a contract, or $599 with a two-year commitment to Verizon Wireless. However, upgrading the Xoom to the carrier's speedy 4G LTE (Long-Term Evolution) network requires sending the device back via a prepaid FedEx envelope and then waiting six days for the upgrade.

"Of all the 'iPad killers' analyzed by the IHS iSuppli teardown team," Lam added, "the Xoom best approximates the cost/performance standard set by Apple."

The Xoom's display and touch screen costs $140, according to the firm, or 38.9 percent of the total bill of materials (BOM) cost. That represents a slight uptick over the iPad's screen and touch-screen assembly at $125. The Xoom's TFT-LCD display boasts a denser pixel format than the iPad's, but the iPad's in-plane switching technology "allows for a wider viewing angle and better picture quality."

The Xoom's memory components cost $80.40, also a rise over the iPad's equivalent memory at $67.80. Motorola is paying an estimated $20.78 for the Nvidia Tegra 2 dual-core processor, far more than the iPad's proprietary A4 processor at around $11.

The first-generation iPad lacks cameras, whereas Motorola spent $14 on the combination of 5-megapixel rear camera and 2-megapixel front.

The Xoom has been earning relatively strong reviews in the wake of its Feb. 24 release, much of it directed at the tablet's supposedly well-designed Android interface.

"When you use the camera, for example, it anticipates that you'll be holding it in landscape mode with your right thumb on the screen, and it simulates the radial control dial of a real camera under your thumb," Forrester Research analyst Sarah Rotman Epps wrote in a Feb. 24 corporate blog posting. "There are no awkward moments, as there were with earlier Android tablets like the Samsung Galaxy Tab and Dell Streak."

The Xoom faces the prospect of increased competition, though, from Apple's next-generation iPad, which is expected to be unveiled in a March 2 media event in San Francisco.