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iPad 2 success causing problems for Xoom sales

Apple seem to be unchallenged so far in the tablet market, and with the recent release of the hot selling iPad 2 it appears that other companies are really struggling to shift units. The Motorola Xoom, on paper is a stunning device, but sales are really poor so far.

Analysts, such as James Faucette from Pacific Crest has said that sales of both the Xoom and the Atrix have been ‘disappointing’. His research has actually led him to cut Motorola’s revenue and earnings projection for the rest of the year and into 2012.

He added “Based on our checks, we believe overall sell-through trends for of the Xoom and Atrix have been disappointing. In particular, we believe Atrix’s lower-than-forecast volumes are a result of the $49 iPhone 3GS and the HTC Inspire, which kept Atrix sales well below forecast in spite of the marketing focus put on the Atrix by AT&T.”

The Atrix is a rather sexy concept smartphone, which has a laptop dock accessory. When placed into the laptop dock, it transforms into a netbook style device, supporting movie playback, web browsing and native Android applications. The price is the biggest problem, as it costs $199 in the states right now. With the iPhone 3GS costing only $49 it proves a tough sell. Additionally, when factoring in the laptop dock costs $500 it isn’t hard to analyse why the sales figures might be poor.

Motorola Xoom: already becoming a victim of the iPad 2 success

Faucette has said that Motorola have serious problems: “They need to substantially differentiate themselves from the rest of the pack. If they fail to do so, we believe shareholders may be looking at another meaningful step down.”

Getting sales figures for the Xoom is difficult, although the Deutsche Bank have said that only 100,000 have been sold. They worked this out by checking the Android developer web sites and then working out how many used the Android 3.0 Honeycomb version of the operating system.

Technically the Xoom is more than a match for the iPad 2, but it really does appear that the mass market audience really care very little about the power of the internal hardware. This is perhaps why Apple’s latest advertisement focuses very little on the internals, but on the user experience. Apple really are hard to challenge in this area.

KitGuru says: Will the Xoom sell in the UK? It is hard to make that call, but with such disappointing sales in America, it looks as if Apple might have this round already in the bag. It is very unhealthy for the market to only have one tablet which is selling well.

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