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Motorola’s tablet computer, the Xoom, and the Atrix smartphone it designed to replace a notebook computer are duds that can’t compete for market share, according to Pacific Crest analyst James Faucette.
Sales opportunities for both the Xoom and the Atrix, which plugs into a separate keyboard and screen to basically replicate a notebook, have been slim because there is a lot of competition that is much cheaper, Faucette said. That includes cheap but very powerful smartphones like the iPhone 3GS, which retails for around $49 with a two-year contract, and the HTC Inspire.
On the tablet front, the Xoom has to compete with the iPad 2 — a goliath that has almost complete control of the tablet market. The Xoom runs Honeycomb, the latest version of Google’s Android mobile operating system optimized for Android. But that might not be enough to differentiate it from the other Android tablets on the market. It also has to contend with Research in Motion’s Playbook, which will run Android apps, and Hewlett-Packard’s upcoming TouchPad tablet, which will run Palm’s WebOS mobile operating system.
I got a chance to play around with the Xoom at the CTIA Wireless 2011 conference in Orlando, Fla., last month and I honestly was not that impressed. It didn’t do much to differentiate itself from the Galaxy Tabs on display there. In comparison, RIM’s Playbook blew me away with a very smooth and intuitive interface. The build of the Xoom also felt a little cheap compared to some of the other tablets on the market — especially when compared to the iPad 2’s aluminum body.
The Atrix is also a bit baffling, if only because of the price. Motorola is trying to market the device as a replacement to notebooks with the screen-and-keyboard add-on. But the dock retails for around $500 with the Atrix — and that’s on a two-year contract. There are some cheaper notebooks that pack more punch than the Atrix’s smartphone guts.
Pacific Crest cut its revenue estimates for Motorola Mobility to $12.2 billion in 2011, down 11 percent from the earlier estimate of $13.7 billion. The wall street analyst firm also cut its 2012 revenue estimates to $13.6 billion from $15.3 billion — or 11 percent. Pacific Crest cut Motorola’s profit outlook by 32 percent and 36 percent for 2011 and 2012, respectively.