Questions about the Xoom's higher price vis-a-vis the iPad have been dogging Motorola as the world waits on the imminent iPad 2. IHS iSuppli has provided at least one answer: the underlying cost of the Xoom is higher due, in some cases, to higher-performance parts.
The current iPad 3G 32GB model--the closest approximation to the Motorola Xoom--is priced at $729, while the Xoom is priced at $799. That has elicited complaints from some quarters. But IHS iSuppli shows there is a valid price differential because of the higher-cost--and typically higher performance--parts used in the Xoom. Of course, if Apple comes out with a comparable feature set in the iPad 2 but maintains its current pricing, then Motorola has a real pricing challenge on its hands.
The upshot: the bill of materials (BOM) for the The Motorola Xoom is $359.92, based on current pricing, compared with $320 for the iPad 3G with 32GB of flash memory, based on pricing from April 2010, IHS iSuppli said today in a research note.
"Motorola has closely lined up the Xoom's component costs with that of the iPad's, especially where it counts: in the touch screen, the display, and the cellular radio. Of all the "iPad killers" analyzed by the IHS iSuppli teardown team, the Xoom best approximates the cost/performance standard set by Apple," wrote Wayne Lam, an IHS analyst.
Lam continues. "The Xoom...equals many of the iPad's best features--while also making up for some of the iPad's shortcomings, such as the lack of a camera--at least until Apple begins shipping its second-generation product line."
Display: The display and touch screen assembly represents the most expensive subsystem within the Xoom--just like the iPad. The Xoom's display and touch screen costs $140, or 38.9 percent of the total BOM cost. This exceeds the iPad's 9.7-inch display/touch screen assembly, which carries a cost of $125, based on pricing from IHI iSuppli's analysis last year.
Overall, the Xoom's display seems to have an edge on features. The Xoom's thin-film transistor liquid-crystal display has a denser pixel format than the iPad at a resolution of 1,280x800 versus 1,024x768 for the iPad, IHS iSuppli said. But the iPad's screen has a leg up on the Xoom with its in-plane switching (IPS) technology. That allows for a wider viewing angle and better picture quality in terms of color presentation than a conventional LCD.
The Xoom's touch screen module features the Atmel mXT1386 touch screen controller, a new 32-bit device capable of registering up to 16 discrete touch points. "This multichip solution for touch screen controls represents an arguably more expensive design than the custom Texas Instruments Inc./Broadcom Corp. touch screen solution employed in the original iPad," iSuppli said.
Memory: Memory is the next costliest Xoom component--again mirroring the iPad, tallied at $80.40, or 22.3 percent of the total BOM, compared with $67.80 for the equivalent 32GB model in the iPad. Both the Xoom and iPad have 32GB of NAND flash, which accounts for the bulk of the memory cost. That said, the Xoom sets itself apart with 1GB of system memory. The iPad's system memory capacity pales by comparison, at 256MB.
Processor: "One of the most dramatic cost differentials between the Xoom and iPad is in the apps processor," according to IHS iSuppli. The Xoom's dual-core Nvidia processor and associated components costs an estimated $20.78, or 5.8 percent of the BOM. "This is almost twice the cost of the iPad 3G's A4 [single-core] processor at slightly less than $11," the market researcher said.
Camera: The Xoom's two cameras are one of the most obvious cost disparities. The iPad--in its current state--has no cameras. The Xoom's 5-megapixel camera on the back and the 2-megapixel device on the front carry a total cost of $14, or 3.9 percent of the BOM.
But all of this is in a serious state of flux if Apple's iPad 2 is introduced tomorrow, as expected. Apple is expected to add a faster processor, camera(s), and a variety of 3G options, among other new features.