Motorola Mobility CEO Sanjay Jha says the Xoom tablet was aimed to be ahead of the performance curve and anticipate what Apple would do with the iPad 2. Jha's biggest bet is that performance will trump price. If not, Motorola Mobility is prepared to go enterprise quickly with its tablets.
Speaking at a Morgan Stanley technology conference Monday, Jha's opening statement summed up the entire tablet market. Let's roll the transcript with Jha talking about the Xoom:
The product has been on the market now four or five days and I think it's been a good start I think for sales.
The advertising just started in the late part of last week. You'll see quite a good series of ads going on in supporting the XOOM product both from ourselves as well as from Verizon.
How do we come to it? You know, I think you and I were talking, the synthesis of the tablet was that we knew that iPad was launched and we got started building a product, and we felt very early on that we needed to deliver a product which had higher performance.
And of course at that time when we were doing it, we sort of thought that by the time we deliver a product, shortly thereafter there will be an iPad 2 or some such. So we had to shoot a little bit in front of where we felt the product -- the iPad product was and therefore we definitely were shooting for performance.
If you look at the iPad today, it's $729 and 3G modem. We felt with a 4G modem with dual core processor with front camera, back camera, with a gigabyte of memory, with accelerometers, everything, that $799 was important. It was at the right price point for an unsubsidized device.
We definitely want to be able to get value for the products that we deliver. We want to compete and perform, first of all. I think in second half this year, you'll see prices of tablets come down a little bit from where they are today. But if we cannot compete on performance and associate that performance to our brand name, that would've been a problem for us. So we shot for performance coming out of the gate.
I think $599 I think is a pretty compelling price. The data plan, as I understand it, is as low $20 per month from Verizon so -- and then it goes up.
In a little more than 300 words, Jha told you all you need to know about the tablet market.
Gallery: Motorola XOOM (Verizon) Teardown
- First, Apple is dictating the market as companies have to build products guessing what Steve Jobs & Co. will do.
- Performance may matter, but it's a wild card relative to price. I'm betting price will win.
- The Android tablet market will be commoditized and that means cheaper tablets are coming.
On that latter point, investors were pressing Jha on when tablet prices would come down. The hint: Android tablets need to come down by Christmas. Jha said component costs should fall as volume picks up. Meanwhile, more price points will be offered. Jha sees 7-inch, 10-inch and even 12-inch tablets coming to market.
The larger screens will be for professional use. Jha also indicated that Motorola is going to focus heavily on the enterprise. "You've seen us focus very heavily in enterprise today. Highest number of enterprise activations in Android are actually on Motorola devices," said Jha.
- Video: First impressions of the Motorola XOOM tablet with Honeycomb
- Hands on with the Motorola Xoom: Five initial insights