Xoom parts cost: $278

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The Wall Street Journal reports that  an estimate from UBM TechInsights on the cost of the Xoom’s parts is $278, a little more than the iPad 1 (32GB 3G).

The accuracy of their claim is questionable since no-one knows what deals Motorola have and so on, not to mention that these are only parts cost and not other variable costs, fixed costs and indirect costs. As such this tells us more about the difference in price from one version of the same tablet to the next and not as much about what the cost to the consumer should be.

The interesting point to take from this is how overpriced the iPad 32GB 3G is compared to the 16GB Wifi model. As I’ve said before, the extra cost of flash memory and a 3G module costs a lot less $about $50 combined) than the actual difference in price between the two. The same goes for Motorola, really, if they ever release that $599 Wifi only model. In case of Apple it lowers the threshold for buying one by making it below that magic $500 mark and they make up the profit on the higher end models by charging more than the difference costs them. Motorola seems to have missed that memo and went for the high priced one only.

We don’t know the actual production cost (everything included) for either though and this comparison is going to be a bit outdated tomorrow anyways, so don’t use this as an excuse to claim high prices. I see the argument that “it doesn’t cost them much to make” and the parts cost is only a portion of the actual cost of any product. Assembly, marketing, distribution, development, software and a whole set of other support costs come on top.

Also don’t think you can go online and order parts to assemble yourself either, that’s not how it works ;)

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Andreas Ødegård

Andreas Ødegård is more interested in aftermarket (and user created) software and hardware than chasing the latest gadgets. His day job as a teacher keeps him interested in education tech and takes up most of his time.

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