20110224 motorola xoom tablet 18
Motorola Xoom. - 

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Kai Ryssdal: With smartphone prices falling, people who really want one already have one. Which clears the way for the next great struggle for the hearts and minds of technology consumers: Tablets.

Apple sold 15 million iPads last year. Analysts figure consumers worldwide will buy anywhere from 50 million to 200 million tablets of all makes and models in the next couple of years. Today, the competition really got going.

Marketplace's Steve Henn reports.


Steve Henn: Today Motorola started selling its Xoom tablet. It's faster than the iPad, has two cameras and stereo speakers. But Michael Gartenberg, a consumer analyst at Gartner, says there is one big catch: the Xoom is $800.

Michael Gartenberg: If you are going to spend that kind of money, the odds are you probably want to see what Apple is going to be offering next.

You won't have to wait long. Apple's expected to unveil the next-generation iPad next week. Right now a similar iPad costs $729, and the cheapest is just $499. Dan Olds at the Gabriel Consulting group says for many consumers a tablet is almost an impulse buy.

Dan Olds: For a lot of people, it is going to be that second or third device. That is one reason tablets are so successful with them is that they are so inexpensive.

Olds says for companies who want to create an iPad-killer, the strategy is pretty straightforward.

Olds: I'd come in with something that is more powerful, more fully featured with as many apps as I could possibly get, and I would come in at a lower price.

Easy for Olds to say. The thing is, undercutting Apple on price won't be easy. Apple's spent billions locking up key parts of its tablet supply chain -- buying up touch screens and other components. That's going to make it tough for competitors like Motorola to build a better machine for less.

There is one market player that's nearly certain to emerge victorious from the tablet wars: the consumer. In the next year, we can all expect features on tablets to flourish while prices fall.

In Silicon Valley, I'm Steve Henn for Marketplace.