Motorola Mobility's Jha on the Xoom: We were anticipating Apple's new iPad

Motorola Mobility's Jha on the Xoom: We were anticipating Apple's new iPad

Summary: Motorola Mobility CEO Sanjay Jha told you all you needed to know about the tablet market in 300 words. Apple dictates the market and Android tablets are going to be commoditized in a hurry.

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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

Review: Motorola Xoom review: Google Android reaches adolescence

  • 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.

Also: Apple's iPad 2: The waiting game ahead of a potential sales boom

Topics: Hardware, Apple, iPad, Laptops, Mobility, Tablets

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108 comments
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  • Money Grab vs Value Play

    What Moto is saying is that they went for the money grab. Any new cutting edge product will have early adapters willing to pay nearly anything for the product. By pricing Xoom above Apple's already bloated price point (we all know Apple charges a premium for the Apple logo alone), Moto is sacrificing sales volume for a chance to recoup R&D costs at the expense of the early adapters. Samsung and the rest of the field will probably do the same as they come to the party.

    Since we know that Apple is reluctant to drop prices, buying the iPad 2 at the asking price (yet to be announced) is the "value play" here. Holding off on buying Android tablets will not only save you money (and save you from being price gouged), but it will also speed up the timeline before some quality manufacturer comes out with a lower priced tablet.

    While far from a Fanboy, I do plan to buy an iPad 2 as soon as it's available.
    gmarino@...
    • money grab

      @gmarino@... Come on, if you are going to buy an iPad 2, shouldn't you be on here telling us how much Android sucks?

      I agree with your point. This is a huge attempt at a money grab by motorola. This device will be great in a few months and probably sell off contract for about $600 or maybe $400 on contract. The device is clearly not ready. Google should stick with HTC for their early device releases. I think it is telling that they did not call this device the "Droid Tablet." Could it be that they released this one to be first and are holding another tablet to be their flagship?

      I respect your desire to buy and iPad 2. iPad delivers a high quality user experience. I have been using Honeycomb on my Nook Color for about 2 weeks and it delivers a much more PC like experience than the iPad so I am going to stick with it and probably buy a real tablet later this year. Maybe iPad 2 will be have more features but I don't think we will ever get away from the basic formula (and hopefully we won't): iPad = simple but less powerful, Android = more features but more complicated/more chance for problems. I prefer it that way. If Apple tries to get more complex with iPad, they will fail. If Google tries to pull back on features to make sure users never-ever get an error, they will fail.
      redhaven
      • Just curious, what is the Nook Color lacking?

        @rdaleypa - you say you'll likely buy a "real" tablet later this year - what will you be looking for that the Nook Color doesn't have? I'm thinking of plunking down $$ for a Wifi-only device, and frankly, am not sure the Xoom is worth 250% more, and the iPad 100% more. But I'd love to hear from an actual owner.
        daboochmeister
      • RE: Motorola Mobility's Jha on the Xoom: We were anticipating Apple's new iPad

        @rdaleypa That's actually the first logical argument I heard for iPad competition. I believe that Apple was competing with itself with iPad 1 and made a wise decision to keep it simple. Apple could certainly have put more Mac OS in iPad but they would have risked their small notebook market share.

        I disagree with you regarding price point, the old premium only Apple would have priced iPad at $699 for WIFI. They recognize that they need to create and keep building a new market for themselves. I really don't see the Mac market growing very much, so iOS has to keep leading the company's growth.
        Mosblest
      • You seem to mistake how Android is being marketed.

        @rdaleypa: With the statement, <i>"Google should stick with HTC for their early device releases,"</i> you imply that Google has control of who does what with Android. In this case, as referenced by other blogs in the past, Motorola worked with Google to create the first real Android tablet rather than waiting for Google to create the OS and build around it as the others have done. From what I understand, Motorola did comparatively little to self-identify the Xoom as compared to HTC's GUI overlay that tends to inhibit some of Android's earlier capabilities. Even now, Motorola has turned out what seems like a decent device compared to the current Froyo-based semi-tablets.

        As for your viewpoint about the iPad itself, personally I'll disagree with the "simple but less powerful" concept since simplicity tends to be more powerful in everyday use; the more complex something is, the harder it is to use and the less tends to get done with it. Proof of this could be the USAF's love/hate relationship with the A-10, basic and simple from a technology point of view, but still the most efficient ground-attack aircraft currently flying. Yes, as time goes on more technological capability is getting added, but even in its earliest days it was possible for an A-10 to take out an F-15 in a low-altitude dogfight.

        What we're going to see is what we saw with the Android phones; lower quality, lower prices, and people who want an iPad but aren't willing to pay the higher price.
        Vulpinemac
      • Just curious, what is the Nook Color lacking?

        @daboochmeister I am not sure this will put my post below yours but I am responding to it. The Nook Color is awesome and easily worth $250 (I have even seen them discounted at times for $200). The problem is that it is so good, I have been thinking with 3G and GPS, I could replace my phone and personal laptop with it (I have a more powerful development laptop for work too). I would still keep my phone but only on a minimal voice plan. I have been joking that Google or Motorola or whoever should be paying a royalty to Barnes and Noble because I never in a million years would have considered shelling out $500+ on a tablet or paid for a data plan but now I probably will after using the Nook.

        The version of Honeycomb running on the Nook is built on the preview image that was released with the Honeycomb SDK so it isn't perfect but it is much better than I would have ever expected and I am sure when the official source code is released, it will improve dramatically. Overall the interface is smooth with little lag (just a touch wiht a couple of animations but it is barely noticable). When I was running froyo on it, it ran perfectly (as good as the Galaxy Tab I have used). The problem with Froyo is that there is only one hardware key so you have to use soft keys which most people like but I just couldn't get used to. Honeycomb is designed to be used without hardware keys so there is no need for the softkeys. Some apps will not run on the Nook with Honeycomb but after reading some of the reviews, I am wondering if it is just a compatability problem with Honeycomb. As I said in my other post though, Honeycomb is very close to a PC experience in that the browser works like a regular PC browser with multiple tabs, there will be Flash eventually (it works with the Froyo version), there is a smooth multitasking experience, the email app is similar to Outlook and the iPad email reader for that matter. I love the email notification widget that is on the home screen so that I can scroll through all my email at once without having to open the app.

        The best thing about the Nook Color is that it boots first from the sd card like an old PC that checked the floppy first. This means that you can put a bootable sd card with an OS image on it to try out and then remove the card and go back to your internal version. The crazy developers at xda have even come up with a way to provide mutiple boot for different versions.
        redhaven
      • RE: Motorola Mobility's Jha on the Xoom: We were anticipating Apple's new iPad

        @Mosblest - Mac sales have actually been growing at more than 20% for quite a while now. They may not be growing as fast as iOS sales, but 20% is way higher than the PC industry as a whole.
        rbgaynor
      • RE: Motorola Mobility's Jha on the Xoom: We were anticipating Apple's new iPad

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        nplmilk
    • om my god, they want to make money

      @gmarino@... So they want to try to get the highest price possible, don't you try to do the same thing when you sell something?

      BTW, as long as they dont hold a gun to your head and make you buy it, you cannot be gouged.

      Don't you think the early adopters know they are paying a high price to get the product early?
      otaddy
      • RE: Motorola Mobility's Jha on the Xoom: We were anticipating Apple's new iPad

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    • It's interesting the way you say that.

      @gmarino@... :
      <i>" By pricing Xoom above Apple's already bloated price point..."</i>
      You clearly state Apple's prices are grossly above what they should be, yet every estimate of the iPad's original pricing put it above $1000. At $500 for the base model and just over $700 for a model roughly equivalent to the Xoom, I do believe we're seeing that Apple has managed force other companies to match their pricing or produce poor-quality devices. As yet, I've not heard of many long-term issues with the iPad in general, so it's not that Apple sacrificed quality to price the iPad where it is.

      <i>"Moto is sacrificing sales volume for a chance to recoup R&D costs at the expense of the early adapters."</i>
      Considering Apple's sales volume at pretty much the same price, your argument really falls flat, though I agree that since the Android Army of Smart Phones on average costs less than half that of the iPhone, you could be right that they'll need to drastically cut prices to compete otherwise.

      <i>"... I do plan to buy an iPad 2 as soon as it's available."</i>
      This gives the lie to all of your above statements as you imply that the iPad 2 is still better quality and a better value despite their "... already bloated price point."
      Vulpinemac
      • RE: Motorola Mobility's Jha on the Xoom: We were anticipating Apple's new iPad

        @vulpine@

        It?s the OS stupid... (no offense), this thing Jobs keeps repeating (if you are serious about SW, you should also build HW. The strength of Apple is that the OS is built FOR the iPad. At the opposite the thing I cannot understand is how and specially where did Moto find the time to develop and build a device based on a sw that hardly existed.
        @L. Dignan: you should really read your text before publishing "and I think it?s been a good start I think for sales....
        ∞Dilemma
    • Exactly what Motorola should do.

      @gmarino@...
      <i>"What Moto is saying is that they went for the money grab."</i>

      For some reason, people think that companies are in it for Altruistic reasons. They are not. They are in business to do one thing. Make money. Part of that is to maximize earnings potential on every product.

      If Moto ends up selling all they can make at $800, why should they offer it at $700? If they use all their supplies and sell all of their $800 3G units, selling a $600 WiFi only model cuts into profits and is a stupid idea.

      Now, if these sit on the shelf and no one buys... Then you have other issues and you price to stimulate sales.
      Bruizer
      • moto

        @Bruizer We aren't faulting them for trying to make money. If Apple puts out an iPad that they could sell for $500 but they can sell 2 million at $900, then they should sell it at $900. I think that what @gmarino was saying is that they rushed the device to market incomplete and are charging through the nose for it because they know that some people will buy it because it is first. There is nothing wrong with that but people should consider it before they buy. If they want to buy it and can afford it, fine but in 3-4 months, a better Honeycomb device at a lower price will be available, and probably more than one.
        redhaven
    • RE: Motorola Mobility's Jha on the Xoom: We were anticipating Apple's new iPad

      @gmarino@...
      I agree with you in part but wonder at your remark on "Apple's already bloated price point", it seems to me Apple brought the price point of tablet/pad devices down. if you followed any previous tablet release they were well over a thousand dollars for pretty basics and useless devices trying to fit a square peg (windows) in a round hole (touched based tablets) and often required special devices not your finger to work. Now the iPad is out and selling people look at the efficiency of scale that Apple created by using mostly their own custom parts and say wow they really are making the money. Vote with you wallet if you don't like it. I find my current $829 iPad with 64GB a better deal than an $800 32GB, possibly faster, though with no/little proven software a better value and experience than what the Xoom is expected to offer. Time will tell if Motorola will be able to take and sustain any market. Give me a compelling reason to look at another tablet and i will. Currently the Xoom is not it.
      geoff.schardein@...
    • Pricing is Product Positioning, too

      @gmarino@...

      If you price your product less than your competitor's you are declaring that it is worth less. They pretty much had to price it above the iPad if they are to maintain their claims of superiority to the entrenched product. (Discounts can come later if they need them for market share.) The converse is if they priced them lower, that would be an admission of being inferior.

      I think the more interesting nugget, here, is that Moto is assuming that the tablet market is growing fast enough, and they are early enough that they won't have to discount their product in a market share fight to get the unit sales they need.
      gallee
      • RE: Motorola Mobility's Jha on the Xoom: We were anticipating Apple's new iPad

        @gallee It will be very hard for iPad competitors to match the price. Apple has pretty much locked in the market for touch screens and there is little capacity left. Therefore you will not see a 9.7" tablet for less than $499... A big win for Apple.
        prof123
      • RE: Motorola Mobility's Jha on the Xoom: We were anticipating Apple's new iPad

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    • RE: Motorola Mobility's Jha on the Xoom: We were anticipating Apple's new iPad

      @gmarino@...

      Where did he say anything about adapters? Adapters for what?
      peter02l
    • Careful with blind faith!

      @gmarino@... It's always dangerous.

      I think many producers will be able to bring much cheaper but technically inferior products to market this year. They already did last year to some extent. Some of these could be pretty decent devices, and no less of a clunker than the ipad (all essentially Unix under the hood).
      Schoolboy Bob