Any tablet over $500 just can't compete with the Apple iPad

Today, we heard confirmation that the Motorola Xoom subsidized price will be $599 with a 2-year contract while the unsubsidized price will be $799. I tried to justify this in my mind and if you compare the Xoom with the comparably speced Apple iPad, the pricing really is not that unreasonable. However, it is clear to me now that no Android tablets can really compete on a large scale if they are priced at more than the $500 lowest cost iPad.

While those who read this blog will likely know the difference in specifications and operating systems, I think most consumers will just look at the experience and the price to make their tablet purchase decisions. The iPad has a huge collection of available applications and a marketing program unlike any other. Consumers likely won't care too much if there is a 32GB iPad available for $599 or a 64GB model for $699 and sales data shows the majority purchase the $499 16GB WiFi iPad. I also doubt too many consumers care about having cellular data connectivity on a large tablet since these devices primarily serve as mobile computers in the house or as media machines while traveling. I find my 3G Samsung Galaxy Tab to be extremely useful on the go, but it has a small 7 inch display and I am a mobile gadget geek.

As Kevin and I recently talked about on MobileTechRoundup show #232, nearly all of these new Android tablets are trying to compete with the 10 inch Apple iPad and so far have not been able to come in at a low enough price. The Samsung Galaxy Tab 7 inch Android tablet has reportedly done quite well and I am a bit mystified why we are not seeing more tablets of this size. It may turn out that all of these larger tablets keep trying compete with the iPad and then Apple rolls out a 7 inch iPad to further own the tablet space. Then maybe they will turn and roll out 7 inch models.

HTC recently announced a 7 inch HTC Flyer Android tablet, but there is not yet any pricing information and it really needs to come in around $400 to compete. RIM's PlayBook is a 7 inch tablet and may do well with BlackBerry owners, but is limited to those who use a BlackBerry. I am still surprised HP did not announce a 7 inch webOS device, but maybe they will eventually. As a person who owned an iPad and switched to a Samsung Galaxy Tab, IMHO 7 inches is the sweet spot for those looking for a mobile tablet. I do think the 10 inch models are attractive as a laptop replacement or home couch browsing device. But again, the price needs to be down in the $500 level.

Do you think any Android tablet can compete at a price more than $500?