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Will Strong-Arm Tactics Spell Doom for Xoom?

Will Strong-Arm Tactics Spell Doom for Xoom?

The Motorola Xoom, an Android Honeycomb tablet offered by Verizon, will launch on Feb. 24 for $800, according to a few tidbits leaked by Best Buy. If true, the Xoom's price will nearly match that of the most expensive iPad currently on the market. In addition, it appears that Xoom buyers will have to sign up for at least a month of cellular data service in order to use the device's WiFi capability at all.

By Richard Adhikari
02/07/11 11:38 AM PT

An apparent leak from Best Buy has kicked up rumors that Verizon Wireless will launch the Motorola Xoom tablet Feb. 24 with a price tag of about US$800.

However, the carrier has refused to confirm that information.

"We have not announced a date," Verizon Wireless spokesperson Brenda Raney told the E-Commerce Times. "We said we would announce sometime during the first half of this year."

Asked about the reported $800 price, Raney pointed out that Verizon hasn't yet announced pricing for the device either.

"We have not announced the availability of the Xoom yet," Motorola spokesperson Jennifer Erickson told the E-Commerce Times.

Xooming Along at 800 Clams

A Best Buy store in Grand Rapids, Mich., apparently posted release date information about the Motorola Xoom as well as the HTC Thunderbolt smartphone on its Facebook page last week.

The Facebook page reportedly said the store would offer the Xoom starting Feb. 24 but did not include pricing details.

That post was later deleted.

Subsequently, a Best Buy advertising circular posted by Engadget indicated the Xoom would be priced at about $800.

Best Buy did not respond to requests for comment by press time.

The Bleeding Edge Bleeds

If the reports are accurate, the Xoom's $800 price tag puts it firmly on the more expensive side of the overall tablet universe, particularly when compared to the lowest-price iPad on the market, the 32GB, WiFi-only version, Chris Hazelton, a research director at the 451 Group, told the E-Commerce Times.

The Xoom has 32GB of memory and 1GB of DDR2 RAM, according to Motorola's tech specs.

"Early pricing tends to be high, as device supply is limited, and Best Buy is targeting aggressive early adopters that are willing to pay a premium to get early access to an Android 3.0 tablet," Hazelton pointed out.

However, prices for the Xoom will fall later as more channel announcements for the Xoom are made, Hazelton predicted.

Competitive pressure will also drive down the Xoom's price tag.

"There will be additional pricing pressure on Xoom when the second-generation iPad comes to market, likely with similar pricing to the first generation," Hazelton elaborated. "Also, the arrival of the BlackBerry PlayBook, which may start at under $500, will put pressure on the Xoom as well."

Reports indicate the PlayBook will be available in March or April. The iPad 2 could be announced as soon as this month and may be available as early as March, though Apple has not announced any dates. Also, the iPad has been on the market less than a year, making its release schedule more difficult to predict than those of other Apple products like the iPhone.

Enforced WiFi Subscription Plan Rumors

The second Best Buy flier reportedly also indicated that data plans for the Xoom would start at $20 per month for 1GB and go up to $80 a month for a maximum of 10GB.

A check of Verizon Wireless' mobile broadband plans Web page shows the data plans reported for the Xoom match the carrier's standard data plan rates for tablets.

However, Verizon will require Xoom buyers to subscribe to a data plan for at least one month in order to activate the tablet's WiFi feature, according to Engadget.

"Perhaps Best Buy is looking to gain additional revenue by signing up Verizon data users," the 451 Group's Hazelton speculated. However, this might backfire as "mandating a carrier data plan out of the gate is a sure way to push buyers to competitive tablet offerings."

Verizon's Raney did not address this issue.


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