updated 11:25 am EST, Wed March 2, 2011
iSuppli says Xoom costs 360 to make
iSuppli in a full version of its cost teardown for the Motorola Xoom claimed it was even more expensive than thought. It put the pure cost of the Android 3.0 tablet at $359.92, or nearly $40 more than the $320 estimated for a 3G iPad with the same 32GB of memory. The actual gap was likely to be wider still as the iPad cost came from April 2010 and would have decreased for Apple over the past year.
Most of the price hike was attributed to parts that cost more even relative to what Apple used when new. It believed the 10.1-inch, 1280x800 screen cost $140 versus the iPad's $125 9.7-inch, 1024x768 display. The price hike wasn't necessarily worthwhile, however, as the Xoom LCD was using less advanced technology than the color rich and more easily seen IPS panel Apple chose.
The Xoom's use of 1GB of DDR2 memory did help it with multitasking but also raised the cost of flash by $13. iSuppli believed the NVIDIA Tegra 2, while much faster, cost $20.78, or about twice as much as the year-old A4 in the iPad. Dual cameras on the Xoom added about $14.
Some savings could be found in the Qualcomm MDM6600 chipset, which saved about $4.70, and the reduced need for physical controls and sensors, which themselves saved about $5.27.
In spite of differences, senior analyst Wayne Lam found that the Xoom "best approximates the cost/performance standard set by Apple" and believed the design was "clearly" aimed at competing with Apple in the mid-range. Lam acknowledged that the next iPad could close the gap but didn't speculate as to how it would compare.
Most expect Apple to use a dual-core processor and dual cameras of its own but without changing the price, which could lead to the Xoom having very few hardware advantages but a higher $800 price versus $730 for a similarly-equipped 3G iPad. Among the cost reductions could be the same MDM6600 chipset, since it was used in the Verizon iPhone and saves both the trouble of having different 3G versions as well as needing a separate GPS chip.
Motorola has been banking on Android 3.0's strengths in multitasking and greater app freedom as well as assumptions that it had a premium product.