Wifi-Only Motorola Xoom Tablet Confirmed; Consumers and Shareholders Relieved

Feb.11.11 | About: Alphabet Inc. (GOOG)

On Thursday, Engadget provided the tech (and investing) world with some highly-anticipated news on Motorola Mobility's (NYSE:MMI) Xoom tablet: A WiFi-only version will exist!

Last week, Engadget published a leaked Best Buy (NYSE:BBY) advertisement for the Xoom's upcoming February 24 release that featured some fine print about a wireless data plan being necessary to purchase the tablet. Responses by readers on Engadget's site (and on my article) were overwhelmingly negative.

Today's article featured evidence of a WiFi-only Xoom based on FCC documentation. (Also, the article linked to a video of a two-toned black and aluminum Xoom, but aesthetics are a little less important than mandatory data contracts at this point.) Since there haven’t been any details concerning actual sales plans for this WiFi Xoom yet, it's dangerous to make assumptions about where and when this model will be sold; it may, disappointingly, end up only being available overseas, or after a time period when only the Wifi + cellular data tablet will be available.

Also, there isn't any information on pricing of this WiFi-only device yet; some Engadget commenters are dreaming of a $500 pricepoint, but with the WiFi+Cell version priced at $800, it seems unlikely that the WiFi-only tablet would be that cheap. (I think that $650 seems like a reasonable price point for the WiFi-only tablet – it will keep consumers interested without cheapening the tablet’s image – but that’s just my guess.)

Shares seemed to react positively to the news; they closed at $31.19, up 81 cents, and traded around $32 at some points during the afternoon on a day containing not much other MMI news and flat indexes.

Obviously, this development does not mean total victory for Motorola's Xoom in the tablet wars. Apple's (NASDAQ:AAPL) iPad 2 is on the horizon, and offerings from Blackberry (RIMM) and HP (NYSE:HPQ), among many others, provide a lot of competing products for consumers to choose from. But the existence of a WiFi Xoom, containing Google's (NASDAQ:GOOG) Android 3.0 tablet-specific operating system, is a very positive development for both technology consumers and MMI shareholders.

Disclosure: I am long MMI.

Additional disclosure: Long MMI shares with a cost basis of $28.