Motorola's Jha: LTE justifies Xoom tablet's $800 price tag

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BARCELONA, Spain--Motorola Mobility (NYSE:MMI) CEO Sanjay Jha confirmed that its first tablet, the Android-powered Xoom, will retail for $800 when it goes on sale unsubsidized from Verizon Wireless (NYSE:VZ). Speaking to reporters here on the sidelines of the Mobile World Congress trade show, Jha justified the price of the tablet, which is higher than a similar version of Apple's (NASDAQ:AAPL) iPad, by saying that the Xoom's eventual upgrade to LTE gives it a leg up on the competition. 

A 32 GB version of the Xoom with Verizon's EVDO data service will retail for $800. The 32 GB version of the iPad with AT&T Mobility's no-contract (NYSE:T) HSPA+ service retails for $729. "We felt that our ability to deliver 50Mb/s would justify the $799 price point," Jha said. "It is 32 GB with 3G and a free upgrade to 4G. Being competitive with iPad is important. We feel that from the hardware and capabilities we deliver we are at least competitive and in a number of ways better [than the iPad]." Verizon has said its LTE network delivers average real-world downlink performance of 5-12 Mbps.

The Xoom runs on Android 3.0, or "Honeycomb," and boasts a dual-core Nvidia Tegra 2 processor. It also features a 10.1-inch widescreen HD display. The device supports 1080p HD video and HDMI output to display content on larger HD screens. Additionally, the Xoom has a front-facing, 2-megapixel camera for video chats over Wi-Fi, EVDO or or LTE, as well as a rear-facing 5-megapixel camera that captures video in 720p HD. The Xoom will be upgraded to LTE sometime in the second quarter. 

Jha said that Samsung's return rate and sell-through rate with the Android-powered GalaxyTab have been "concerning," but said he was confident enough to launch the Xoom at the $800 price point. Importantly, Verizon has not yet revealed its LTE data plans for tablets or smartphones. 

Jha also said that Motorola will release a Wi-Fi-only version of the Xoom. He would not be drawn on the exact price, but said it would be "meaningfully cheaper. The price is set by iPad at $599, and we will be right around there." The 32GB Wi-Fi-only version of the iPad sells for $599.

In an apparent slip, Jha also seemed to divulge the existence of Google's music service, which Google has never publicly acknowledged. Jha said that an ecosystem is composed of applications, developers and services. "Google's mobile services--and that includes music services, video services..." Then, according to the Wall Street Journal, correcting himself, he said, "There will be music service, there will be video service."

For more:
- see this WSJ blog post (sub. req.) 
- see this Reuters article
- see this GigaOM post

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