Verizon offers $200 subsidy for Motorola Xoom

Verizon Wireless (NYSE:VZ) will sell the Motorola Mobility (NYSE:MMI) Xoom tablet starting Feb. 24 for $600 when it is paired with a two-year contract, $200 cheaper than without the contract.

Motorola Xoom verizonVerizon also said EV-DO data pricing for the device will fall under its previously established tablet pricing plans: 1 GB of data for $20 per month; 3 GB for $35; 5 GB for $50 and 10 GB for $80. The carrier did not disclose what it will charge for LTE data; Motorola expects to release an LTE-capable Xoom shortly.

The Xoom appears to be the first tablet Verizon has agreed to subsidize. The carrier began selling Samsung's GalaxyTab Android tablet last year for $599 with month-to-month service; the device now goes for $499 without a contract. Other carriers have offered significant subsidies on the GalaxyTab; Sprint Nextel (NYSE:S) launched the GalaxyTab tablet for $399 with a two-year contract late last year.

Verizon also sells the iPad and offers the 32 GB version bundled with its MiFi product for $730 without a contract.

Last week at the Mobile World Congress trade show in Barcelona, Spain, Motorola Mobility CEO Sanjay Jha said the Xoom is worth $800 (sans contract)--despite the fact that the 32 GB version of the iPad with AT&T Mobility's (NYSE:T) no-contract HSPA+ service retails for $729. "We felt that our ability to deliver 50 Mbps 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. Motorola will upgrade the Xoom to LTE sometime in the second quarter--existing customers will be able to upgrade their device to LTE at no additional charge.

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. A Motorola spokeswoman told FierceWireless that the company will release a Wi-Fi-only version in European markets in the second quarter but declined to comment on U.S. plans for the Wi-Fi-only version. 

The Xoom runs 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.

For more:

- see this release

Related Articles:
Motorola's Jha: LTE justifies Xoom tablet's $800 price tag
Motorola unveils Xoom, Android 'Honeycomb' tablet
HTC debuts Flyer Android tablet, launches Facebook integrated phones
Qualcomm unveils quad-core Snapdragon chipset for tablets
RIM teases LTE, HSPA+ versions of the PlayBook

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceWireless!

The Wireless industry is an ever-changing world where big ideas come along daily. Our subscribers rely on FierceWireless as their must-read source for the latest news, analysis and data on this increasingly competitive marketplace. Sign up today to get wireless news and updates delivered to your inbox and read on the go.