NVIDIA CEO Jen-Hsun Huang isn’t happy with the state of the Android 3.0 Honeycomb tablet market, and he made his thoughts known in an interview with CNET this week.  In the interview, Huang blamed poor tablet sales on pricing and positioning gaffes, as well as a lack of Android 3.0 tablet apps.

Huang’s concerns are not surprising, since NVIDIA has invested heavily in the Android 3.0 Honeycomb tablet market.  Nearly all Android 3.0 tablets currently available or expected to be released in the near future use NVIDIA’s dual-core Tegra 2 processor.  Success in the tablet market is critical for NVIDIA, who continues to face pressure from low cost Intel GPUs in the PC market, as well as longtime competitor ATI (now AMD).

So who or what is to blame for the lackluster sales of Android 3.0 tablets?  Huang noted, “It’s a point of sales problem. It’s an expertise at retail problem. It’s a marketing problem to consumers. It is a price point problem.”  He continued, “The baseline configuration [of tablets] included 3G when it shouldn’t …Tablets should have a Wi-Fi configuration and be more affordable. And those are the ones that were selling more rapidly than the 3G and fully configured ones.”

Huang’s statements clearly refer to the Motorola XOOM, which launched at an absurd $800 price point for the 3G 32GB model.  At the time Motorola CEO Sanjay Jha noted that the XOOM’s price premium was partly due to upcoming 4G LTE functionality.  However, customers didn’t bite…and rightfully so – Motorola missed it’s 4G upgrade schedule and XOOM tablets are still 3G only.

Motorola later released a 32GB WiFi-only XOOM for $600, in line with the similarly specced iPad 2.  However, the company failed to release a low end 16GB WiFi-only version of the device.  This is particularly confusing, since unlike the iPad, users can easily add more storage to Android 3.0 tablets with microSD cards.  Users can turn a 16GB Android 3.0 tablet into a 32GB Android 3.0 tablet for just $20 – there was never any need for Motorola to introduce the 32GB WiFi-only model, particularly at a $600 price point.

Although Huang didn’t call out Motorola specifically, his comments were clearly addressing Motorola’s pricing and positioning of the XOOM.  Evidently, Huang was not impressed with the 250,000 XOOM units sold by Motorola in the first quarter of the device’s release.

Huang also blamed the limited selection of Android 3.0 apps for slow growth in the Android 3.0 tablet market.  This is undeniable – the number of Android 3.0 tablet apps totals only about 100, compared to the thousands of apps that are now available for the iPad.

Still, Huang noted that there is much to look forward to in the Android 3.0 tablet market.  The number of Android 3.0 tablet apps continues to increase slowly, but steadily, and two key vendors, ASUS and Acer have Android 3.0 tablets at attractive sub $500 price points.

Huang’s comments about Motorola were dead on.  Motorola simply did a poor job of positioning and pricing the XOOM, and the result was embarrassing for not only Motorola, but the Android 3.0 tablet market in general.  We’re excited about the many new Android 3.0 tablets that will be released soon, and next quarter we expect that Huang will be more positive about the state of the Android 3.0 tablet market.

Source:  CNET