Xoom

Market Definition

Motorola’s Xoom will be competing against a few tablet players like Samsung, Dell and LG, in addition to Apple and RIM. Motorola will introduce the first on Google Android’s newest version 3.0, Honeycomb, an only tablet platform. The platform includes attractive features like support for big screens (7-9 inches), a totally new user interface, extensive multi-tasking and multiple home screens among other features.

It is estimated that the Xoom and the entrance into tablet market will account for 20% of the Motorola Mobility’s stock value. The current price estimate sits 15% below market price at $25.45.It is expected that 4 million Motorola Xoom tablets will be sold in 2011, with projected annual sales summing to 8.5 million. The expected sale figure is based on the anticipation that Motorola Mobility can take 30% share of all Android-based tablets.

The tablet market is expected to grow by 28 million in the next year based on an IDC study. 45 million tablets will be sold in 2011 and with 30% being Android tablets, there would be 13.5 million Android unit sales. Finally, with Motorola garnishing up 30% it leaves them with 4 million sells in 2011. A second report has predicted that sales in 2011 will reach 55 million, with growth of 224%. In this report it can be deduced that Motorola could sell 5 million tablets in 2011. Also, the report includes an additional 3% increase in the Motorola Mobility price estimate to the initial $25.45.

ENVIRONMENTAL SCAN:

Economic Forces:

-Industry relies on purchases from large firms, telephone/telecommunications companies, and broadcast companies (tv and radio)

-'Recreation' function of tablet targets disposable income whereas the main design focus of the Xoom focuses its ability to facilitate business function. (Dual faceted demand)

-Vastly expanding markets in India and China present two sides of demand:

-Spike in private use demand/individual purchase demand

-Spike in business purchase demand and...