Android tablet on the cheap: Acer Iconia A500 is the XOOM "Light"

Acer's Iconia A500 tablet features the same exact hardware specifications as Motorola's XOOM, but with half the flash storage and $150 cheaper.

Back in early March, I proposed that Motorola create a new SKU for their XOOM tablet with a slightly reduced feature set, which I tentatively called the "XOOM Light".

If you don't remember the piece, here's the crux of the argument:

If iSuppli’s BOM is to be believed to be within striking range of actual component costs, then Motorola can shave anywhere between 50 and 60 dollars off their manufacturing cost on the XOOM by slicing the flash storage in half to 16GB and going with less expensive camera parts, putting it closer on par with Apple’s iPad 2. This would allow the XOOM to retail for about $50-$80 less than the entry-level iPad 2, depending on how close the company wants to cut their margins.

The only way XOOM is going to be a repeat hit for Motorola Mobility in the same way the Droid was for their handset business is to undercut the iPad 2 on price. With a lower price and a similar feature set to the iPad 2, a large segment of consumers might be willing to overlook some of the shortcomings on Android 3’s current tablet app gap.

While this plea seems to be falling on deaf ears at Motorola, apparently this idea resonated with one of its competitors, the Taiwanese-based PC giant Acer, Inc.

Today the company along with channel partner Best Buy announced pre-orders for its Android 3-based iPad competitor, the Iconia A500, which has nearly identical specifications to the Wi-Fi only version of the Motorola XOOM.

See: Motorola XOOM Specifications

See: Acer Iconia A500 Specifications

The only significant difference? 16GB of flash memory instead of 32GB which lines up with the entry-level Wi-Fi iPad quite nicely. At $450.00, the 10.1" tablet device costs $50 less than the entry-level iPad 2, and is $140-$150 less than the XOOM.

It seems that Acer didn't even need to sacrifice the camera capabilities to make up for component costs on the BOM in order to compete with the iPad 2. It also has identically-specced 2MP front-facing and 5MP, LED flash rear-facing cameras as the XOOM.

In addition to identical SoC and PoP, memory, RAM, GPU, screen, cameras and ports, the device is also the same thickness of the XOOM, at 12.9mm, roughly half an inch.

Note to all Android and other would-be tablet manufacturers: The bar for 10.1" full size, 16GB devices that are not carrier locked has now been lowered to $450.00. That means anything in the tablet market that is not Apple needs to cost this much or less, with similar specifications.

Oh and HP, regarding your WebOS 3 TouchPad, I'm also talking to you.

Today I pre-ordered one of the Iconia A500 devices, sight unseen. If it's anywhere near as good a device as the XOOM as far as build quality is concerned, I'm willing to put up with some of the current shortcomings in Android 3 in order to keep a test Honeycomb device in house.

I'm not advocating that most consumers look at this device in lieu of the superior application ecosystem on the iPad 2, but this price point was enough for me to take action to meet my immediate requirements. For the same reason, Android developers will probably jump at the opportunity to buy one of these devices as well.

The question now remains of how Android 3 devices can actually differentiate at the $450.00 price point, and if it's even possible to lower that price bar any further. I think the price bar can be lowered, but there's only one company who I believe can accomplish this: Amazon.

As I mentioned in my November 2010 piece "Kindle's Secret Sibling: Amazon's Android Tablet" it is my belief that the online retailer and bookseller has a definitive plan to release such a device.

What the exact specs for this device are is left to the imagination and may be pure speculation, but certainly if you eliminate the need for Google licensing of the Android OS and the Android Market along with Google's apps, replacing them with Amazon monetizing equivalents, the price of a similarly-specced tablet could easily be reduced another $50-$80.

An Amazon Android tablet using the Open Source, unlicensed version of Honeycomb, combined with Amazon Appstore for Android,  Kindle for Android, the Amazon MP3 service as well as Amazon Video and Amazon Cloud Player makes for a near-complete tablet OS and application stack, which would allow the company to monetize their properties on the device and take the "Give away the razor but sell the blades" approach.

All of this is dependent, of course, on Google actually releasing the source code to Honeycomb outside of their approved vendors list, a delay which currently has the Open Source community absolutely livid.

The only thing that would actually be missing from such a theoretical device is a native Android mail client to talk to GMail, Hotmail and other services including corporate Exchange email, along with the appropriate calendar sync services, mapping and integrated search engine apps.

Presumably the missing pieces could be coded in-house by Amazon, or purchased/licensed from a 3rd-party. I could certainly see Amazon partnering with someone like Microsoft to provide Bing search and mapping in lieu of Google, as well as a full license of Activesync and native Exchange client.

Whatever the outcome, it's clear that Acer has just brought prices for iPad 2 competitors down to much more realistic and acceptable levels. Whether it will plunge any further in the immediate future remains to be seen.

Has Acer re-defined the pricing for the full-sized Android tablet space? Talk Back and Let Me Know.