Listen, I’ve yet to play with the new Xoom 2 models — or, as the new devices are called at Verizon, the XYBoards. I’m sure both the 8.9 and 10.1 models are fine tablets. They probably power through the hundred or so Honeycomb apps like a championship thoroughbred. But it doesn’t matter. No one is going to buy the new-ish tablets. They will flop harder than the original Xoom.
Right now there are essentially two tablets that matter on the market: the $500 iPad and the $200 Kindle Fire. Because of this, there are just two price points. The iPad set the bar at $500 for full-featured tablets while the Fire is doing the same for budget models. Any tablet that attempts to jam itself into this pricing scheme is currently destined to fail. The low-end wants the Amazon pedigree while the high end knows that they want an iPad. The mid-range Android models are strong, I will admit, but they aren’t what compels the average shopper.
Take the Motorola Droid XYBoard LTE tablet. Never mind that it’s essentially the same hardware as the original Xoom with the silly addition of an IR blaster. Never mind the dumb name. Heck, forget that it’s lacking the SD card slot found on the original. It’s priced completely out of its market. Only ignorant fanboys will buy it.
The 10.1 model costs $529 out the door but requires a two-year agreement with plans starting at $30 a month. That means, two years from now, when the Tegra 2 tablet is countless generations behind current models, the customer would have spent at least $1250. Even worse, because the data package is tied to a contract, the XYBoard owner is liable for a costly early termination fee if they decide to cancel the data package early.
As shocking as it might be, this absurd pricing scheme isn’t exclusive to the XYBoard. The HTC Jetstream hit AT&T in September and initially carried two-year contract price of $699 (it was later dropped to $599). The iPad is available from Verizon and AT&T for slightly more than both the HTC and Motorola model, but does not require the same two-year contract. Subscribers can turn the 3G wireless on or off at any time without paying a penalty.
I’m a big fan of Android but the past nine months were painful. Nearly every month a hot tablet would leak, which would cause the Android community to itch uncontrollably. But then the official details would be announced and the MSRP would most often kill the buzz. With the notable exception of Asus pricing the Transformer at $399, Android manufacturers ignorantly priced their first generation devices directly against the iPad. They didn’t stand a chance. Slowly but surely the iPad chopped each one down until the Fire hit the scene. Now, as an Android supporter, my de facto champion is a $200 budget tablet that strips away all the beautiful user elements found in Honeycomb in favor of an enhanced Amazon storefront.
The XYBoard will likely be quickly replaced with another model. It’s built on an old NVIDA platform, and with Ice Cream Sandwich nearly here, Google and Motorola Mobility likely have a flagship device ready at launch. But that’s the Android game now: Flood the market with tablets built on re-purposed parts. It might be good for the maker and wireless carrier’s bottom lines, but the practice of tying top-tier models down with 2-year contracts will ultimately slow the adoption rate. Recent studies show that Android tablets have a very limited market appeal and these buyers aren’t likely willing to pay early termination fees just to get a slightly upgraded device.
2012 should by all accounts be a big year for Android tablets. Ice Cream Sandwich is said to unify the development of Android tablets and phones, which will hopefully lead to an influx of tablet apps. Plus, while Android does have a limited consumer interest, it’s doubled since the first part of 2011. However, if Android tablet makers continue following the same pricing schemes as they did in 2011, the platform will start to tread water, creating an easy meal for the great white shark that will be Windows 8.