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Motorola Xoom costs more to build than iPad

Xoom tablet estimated at $360, $40 above Apple's iPad

A teardown analysis of Motorola's Xoom tablet by IHS iSuppli found its materials cost nearly $360, compared with $320 for materials in the comparable 32GB iPad 3G.

As expected, the biggest differences were with the Motorola Xoom's dual-core processor, compared with iPad's single-core chip, and Xoom's two cameras. The current iPad has no cameras.

See also: Live: the Apple iPad 2 launch

At retail, a Xoom without a Verizon two-year contract sells for $799.99 in the US. A comparable iPad sells for $729.

That's a retail difference of nearly $70. Given the processor and camera differences, which increase the materials cost for Xoom by $24, the difference in cost with a comparable iPad is reduced to about a $46 premium for Xoom.

The analysis found that iPad costs were lower in every subcomponent except for the baseband/radio frequency/power amplifier section, which was about one-third higher for iPad.

Motorola's Xoom and the iPad have similar size screens at about 10-inch, and have been widely compared in general appearance and functionality. Xoom only hit the market last week on Verizon Wireless. The iPad first went on sale last April.

"On the inside, it's a pretty good match as well," the newly-renamed IHS iSuppli said in a statement Tuesday.

The company did a physical dissection of the Xoom, examining the materials, and found that Motorola "closely lined up the Xoom's components with that of the iPad's, especially where it counts: in the touchscreen, the display and the cellular radio," said Wane Lam, an analyst at IHS iSuppli.

"Of all the iPad killers analyzed by the IHS iSuppli teardown team, the Xoom best approximates the cost/performance standard set by Apple ," Lam said.

While the Xoom makes up for elements missing in the iPad, such as no camera, Lam noted that iPad 2 will likely fill the gaps when announced as expected on Wednesday.

One analyst suggested Tuesday that Apple sould get a jump on the tablet competition with iPad 2 by dropping the price and expanding its distribution.

Xoom's 10.1-in. display and touchscreen materials cost $140, or 39% of the total bill of materials, according IHS iSuppli's analysis. Meanwhile, iPad's 9.7-in. display and touchscreen cost $125, according to analysis done last year.

Memory is the next biggest subsystem expense in the Xoom, costing $80.40, or 22%. That compares with $67.80 in the 32GB iPad.

One of the biggest differences in cost is the processor in each device, with double the processor costing nearly twice as much. Xoom's dual core Nvidia Tegra 2 processor and associated parts costs $20.78 or 5.8%, almost double the iPad 3G's single-core A4 processor, which costs less than $11.

Xoom also has two cameras while iPad has none. The 5-megapixel camera on Xoom's back and the 2-megapixel camera on the front together cost $14 or 3.9%.

Other comparisons made include:

  • Baseband/radio frequency/power amplifier subcomponents: Xoom, $14.65; iPad, $19.35.
  • Power management subcomponents: Xoom, $11.26; iPad, $10.57.
  • User interface functions: Xoom, $9.12; iPad, $14.39.

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