Motorola released the 3G version of the first Honeycomb-based Android tablet in February. The $799 contract-free price left many potential users walking away with sticker shock.
Apple announced the iPad 2 just a week later and the new device boasted a faster processor (dual cores), and a lighter and thinner body, all for the same price.
Early reports indicate that Xoom 3G sales are underwhelming. That shouldn't be a huge surprise. Even without the iPad 2, the Xoom launched at a price point that put it out of reach for many consumers. Additionally, the fact that one of the primary differentiating features of the Xoom -- support for Adobe Flash 10.2 -- wasn't available at launch, makes the whole product seem rushed to market.
In contrast, the Wi-Fi only model will be available for $599 for a 32 GB unit -- the same price as an equivalent iPad 2. Furthermore, a beta version of Flash Player 10.2 is rumored to be available later this week. With any luck, a beta or release candidate could even ship (or at least be available in the Android Market) with the Wi-Fi variant of the device.
Even at the new price point and with Flash support, my gut tells me that the iPad 2 will continue to be the tablet that most users gravitate toward. Why? Software. Honeycomb shows tremendous potential, but developers are just now starting to release Honeycomb-optimized versions of their apps. In contrast, the iPad has had a year to build a 65,000+ library of iPad-optimized apps.
It is, however, possible that iPad 2 mania could work in Xoom Wi-Fi's favor. Because demand for the iPad 2 continues to be so strong, Apple is having a hard time keeping units in stock. The international launch of the iPad 2 is planned for March 25 -- two days before Xoom Wi-Fi hits Amazon.com, Best Buy, Costco RadioShack, Sam's Club, Staples and Walmart stores. Customers looking for an iPad 2 at Walmart or Best Buy might be persuaded to get the Xoom (provided it is in stock) for the same price.