Apr 26, 2011 (10:04 AM EDT)
Motorola Xoom Sales Worse Than Thought
Read the Original Article at InformationWeek
The alarm bell has already sounded several times over sales of the Xoom. Earlier this month, Pacific Crest analyst James Faucette's channel checks concluded that sales of the Xoom have been "disappointing." His research led him to cut Motorola's revenue and earnings projections for the rest of the year and into 2012.
Following Faucette's report, Deutsche Bank pegged the number of Xooms sold at just 100,000. It arrived at this estimate by checking the Android developer website and tallying the number of devices using Android 3.0 Honeycomb.
Now comes Global Equities analyst Trip Chowdry to sprinkle more doom and gloom on Motorola's outlook. According to Chowdry's estimates, Motorola has manufactured between 500,000 and 800,000 Xooms so far, but has sold only 5% to 15% of them. That places the number of Xooms sold between 25,000 and 120,000. Chowdry's estimate may cover a large range, but even at the high end, 120,000 sold out of 800,0000 made isn't a great scenario for Motorola.
Many had initially estimated that Motorola would sell 1 million Xooms before the end of the first quarter--which ended March 31. Component makers such as Taiwan-based Catcher Technology and Foxconn Technology, which are supplying parts for the Motorola Xoom tablet, indicated earlier this year that Motorola planned to manufacture between 700,000 and 1 million Xoom tablets by the time the first quarter of 2011 closed.
Chowdry had some choice words for Motorola, the Xoom, and Android 3.0 Honeycomb. He called the Android Market a "disaster" and bashed Honeycomb for being, "unstable," "incomplete," and, worse, "dead on arrival."
It's true that the Android 3.0 Honeycomb user interface needs some polishing, but I disagree with Chowdry's comments about its stability. I've had a Honeycomb tablet on hand for nearly two months and have yet to experience any real stability problems. The Android Market for Honeycomb could be a lot better, though, with more apps optimized for the tablet form factor. Google has yet to fully explain what the hold up is with respect to kicking out more Honeycomb applications.
By way of comparison, Pipar Jeffries analyst Peter Misek believes RIM sold about 45,000 PlayBooks at launch. Misek believes as many as 25,000 customers pre-ordered the PlayBook, with the rest heading out to retail stores on April 19 to grab it. RBC analyst Mike Abramsky thinks 45,000 is a bit on the low side, and he pegs first-day sales at closer to 50,000.
"The launch appears to have been stronger than the launch of Motorola's Xoom Tablet, or the Samsung Galaxy Tab, although it's too early to judge sustainability," Abramsky said in a note to clients last week.
RIM has not shared any detailed information on the number of PlayBooks sold. It's interesting to note that the PlayBook, despite its weaknesses, may have outsold the Motorola Xoom, which received much better initial reviews.
Motorola hasn't released sales figures for the Xoom yet.