Motorola Xoom Sales “Slow,” “Disappointing,” Say Analysts

By  |  Tuesday, April 5, 2011 at 7:44 pm

Motorola’s Xoom tablet doesn’t lack for hype. Actual sales, however, may be another matter. At least two analysts have come out in the past two days and cited “poor” Xoom sales in adjusting their forecasts for Motorola revenue in the current quarter.

RBC Capital Markets analyst Mark Sue was the first on Friday, and said higher competition would put a strain on the company. He cut his Xoom shipments forecast by 25% to 300,000 units in the current quarter and called sales “slow.” This was followed by Pacific Crest analyst James Faucette who called Xoom sales (and of Motorola’s Atrix 4G smartphone) “disappointing.”

What’s the issue here? I’m going to take an educated guess and say its pricing pressures. In the case of the Xoom, it is still priced well above the market-leading iPad. For such a premium, Motorola needs to prove its worth to the consumer and I don’t think it has done that.

As Faucette notes, the Atrix’s issues may actually result from other smartphones on AT&T being priced well below the device, such as the $49 iPhone 3GS. The Atrix on the other hand retails for $199.99. While it’s the same price as the iPhone 4, if people are looking for a cheaper solution on the carrier with a decent feature set, it’s certainly there.

If anything’s obvious from this, it’s that price is king. Will this lead Motorola to reconsider its strategy? I guess we’ll find out.

 
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20 Comments For This Post

  1. jack Says:

    pricing is one of them but the products arent impressive.
    xoom and atrix are both ugly ass hardware as well as software.
    The atrix is priced at 200 bucks for just the phone, this is the same price that almost all high end phones start at.

  2. preViously Says:

    The 32GB wifi only Xoom is the same price as the 32GB wifi iPad2. I think you need to be more fair with the price comparisons.

  3. Aaron Martin-Colby Says:

    Price and also what they pushed the Atrix as. They weren’t just selling it as a cell phone, they were pushing the docks and laptops, which were comically over-priced. Moreover, pushing them as a package means that if people don’t want the docks, they then think that the cell phone isn’t for them.

  4. Groovy Says:

    The Atrix solves a solution looking for a problem. Only engineers with no social skills would think it's a good idea.

    People don't want all their important information on a phone that can be so easily lost or stolen because it's happened to almost everyone in the past. How does one back up an Atrix? The "cloud" isn't good enough, especially if you have multi-gigabytes of content.

    Atrix is a product that no one needs. It's the hardware equivalent of a music subscription service – something only hardcore geeks can love.

  5. Jeremy Toeman Says:

    does this need quite so much analysis? make regular people use the Xoom for 15 minutes, then see your conversion rate. here's a hint: it'll be dismal. it's a *terrible* product, and anyone who doesn't have a vested interest in Android will quickly agree. not only doesn't it compete with the iPad, it barely competes with the Newton.

  6. stone Says:

    We should learn how to find the right thing xoom have rather than say no to them, while ipad 2 is not the only right tablet in the area.

  7. Hamranhansenhansen Says:

    It doesn't matter, you are missing the point. iPad starts at $499.

    Every iPad is a $499 iPad. A $729 iPad is just a $499 iPad with optional accessory 16GB extra storage and optional accessory 3G modem. The $729 iPad buyer showed up to buy a $499 iPad and bought a couple of extras. They left with 3 products: $499 iPad, $100 16GB storage module, $130 3G modem. The iPad is still the exact same iPad the $499 buyer got: same SoC, RAM, screen, enclosure, magnets, battery, system software, and apps.

    So what you have is the highest-end category-defining product is $499. Yes, there are accessories available *if* you want them. Every product has accessories. Yes, the accessories cost money, duh. But every buyer is fundamentally showing up to buy a $499 iPad and walks out with that.

    XOOM has to start at $399 just to get consumers to say "I better take a look at one of those." XOOM is literally double the price it needs to be.

    Whatnmakes it even worse for XOOM is the iPad data plan is much cheaper and has no commitment, so the iPad 3G modem pays for itself.

    And, the above assumes XOOM is an equally good product to iPad. It's not even close. So even at $399, most people are going to pass and buy an iPad.

  8. Hamranhansenhansen Says:

    Yeah, the XOOM is not impressive. The function of an iPad is to be an "iPod computer." It is a small device that is as easy to own, use, and maintain as an iPod, but instead of running music, it runs computer apps. Both native apps and Web apps. Not phone apps, but full-size PC apps.

    XOOM is not as easy to own or use as iPad, it is more like Windows. And XOOM has no apps. Not only does it not have any native apps at all, but even its Java applet platform only has 20 apps. And even though its Web app platform is based on the iPad's open source Web engine (because "Apple is closed," ha ha ha ha) the XOOM implementation is so buggy that most modern Web apps won't run.

    So XOOM misses the point in every way.

  9. David Says:

    I'll go one step further. It doesn't even *solve* a problem. It is a poor pc. Who asked for a phone that could plug in to a keyboard and act as a browser?

    No one. Not even subconsciously. People may have answered "A faster horse" when asked about an improved means of transportation, but ultimately, what they wanted for something faster, more powerful and more efficient.

    The Atrix doesn't offer any advantage over any other phone and its main claim to fame is useless. This is why the iPhone, despite being almost a year old continues to go toe-to-toe with the latest Atrix or Thunderbolt.

    They are deeply flawed devices.

  10. David Says:

    Agreed. The widget idea is just…not well thought out, IMO. Vista had widgets and how well did that turn out?

    Xoom is a walking advertisement for how poor Flash truly is. The marguee defining feature and it doesn't work. Stuttery, working on some sites, not on others is NOT WORKING. Do you think for an instant that flash would have succeeded if it worked as well on the desktop as it does on these mobile devices? Only hardcore Android people or Flash developers would put up with this.

    And features for the sake of features…Google 3d maps. Interesting for two minutes. Heck, my house still doesn't show up on street view(not that I'm complaining) so how well does 3d maps work?

    "True multitasking." Not a selling point. Rim and HP are going to learn this lesson big time in the coming months. Almost no one is walking around thinking, "I wish I had a devices that did true multitasking." just like no one is saying "I wish I had a 529 plan." Most people want to play music and browse, get their phone call or email when it comes in and keep going where they left all. Or save for college. Most people are not interested in watching a video play in a 2" window while looking at a weather widget update.

  11. David Says:

    Agreed. The widget idea is just…not well thought out, IMO. Vista had widgets and how well did that turn out?

    Xoom is a walking advertisement for how poor Flash truly is. The marquee defining feature and it doesn't work. Stuttery, working on some sites, not on others is NOT WORKING. Do you think for an instant that flash would have succeeded if it worked as well on the desktop as it does on these mobile devices? Only hardcore Android people or Flash developers would put up with this.

    And features for the sake of features…Google 3d maps. Interesting for two minutes. Heck, my house still doesn't show up on street view(not that I'm complaining) so how well does 3d maps work?

    "True multitasking." Not a selling point. Rim and HP are going to learn this lesson big time in the coming months. Almost no one is walking around thinking, "I wish I had a devices that did true multitasking." just like no one is saying "I wish I had a 529 plan." Most people want to play music and browse, get their phone call or email when it comes in and keep going where they left all. Or save for college. Most people are not interested in watching a video play in a 2" window while looking at a weather widget update.

  12. Antrim Says:

    I agree. I just tried out a Xoom at Staples (who is putting on a BIG push with endcap displays and all). Very confusing and complicated interface. Hard to see what to do next. Hard to figure out which of the many control scheme to use to accomplish anything. I think the issue is less with Motorola and more with Android, which (like, sadly, many Google products) starts with features rather than experience. It takes a lot of thought to run this device, and that thought is just overhead. The features diminish productive work, not enhance it.

  13. kwubba Says:

    Wow, hard to use? Confusing? You sound like an apple fan boy. Both devices (Ipad & Xoom) are easy use. It comes down to where you lean. It's ok to say you prefer the Apple stack, because like it's integration with itunes and your other apple products. But to bash Android & Xoom with nonsense is ridiculous.

  14. Kwubba Says:

    Few apps? My guess is you've never used or even seen the Xoom more or less honeycomb. None of you above statements are factual. 99% of the Droid apps run on the Xoom (just as when the ipad came out the iphone apps ran on the Ipad). Apps are now just coming out to support the Dual core processors and the other enhancements of the Honeycomb platform. Apple is going through the same issues…how many of those apps in Apples App store are tuned for the new Ipad 2 Architecture? None…lol….Stop using blogs to get your information and maybe do some actual research…

  15. Perspectively Says:

    We're talking "tablet specific" apps, not resolution-doubled phone apps. The iPad has 65000+ tablet-specific apps. Even at launch, it had 1000. The Xoom, on the other hand, launched with less than 20, and it's just not impressive enough to sell. Oh well.

  16. Harry McCracken Says:

    The Xoom runs Android apps, true, but stretching them to full-screen results in an experience that ranges from OK to poor. Tablets need tablet apps, and there just aren’t many for Android yet. I’m hoping that changes as more tablets come out…

  17. David Says:

    Please tell me you are kidding? The iPad had 5000 tablet apps day one and now has what 70k?

    The Xoom has less than 100 tablet apps.

  18. i<3bewbs Says:

    bahahah!

  19. Chris Says:

    I own both the iPad2 and the xoom and I like them both, the xoom is a new product with a new OS, there are going to be bugs which will be fixed down the road and keek in mind IOS had it's share of bugs and short comings as well.

  20. AK-LA Says:

    You really have no idea about xoom at all please do your resarch about pricing before you open you mouth