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Motorola Xoom Not Giving iPad 2 Much of a Fight

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Every market deserves healthy competition to push the industry forward. Several companies at their peaks striving to one-up each other in a symbiotic, "King of the Mountain" relationship. In the end, the consumer is rewarded with consistent innovation and improvement.

But with Cupertino so far ahead, it would seem that tablet computing is not such a market.

According to Pacific Crest analyst James Faucette, the Motorola Xoom -- Android's Great White Hope that would steal some market share from the dual generations of Apple's iPad -- hasn't been flying off the shelves as previously hoped. Having checked the channels for sell-through trends, Faucett claims sales of the Xoom and the Atrix -- Motorola's dockable smartphone -- "have been disappointing." The Atrix in particular, Faucette asserts, was hit hard by the $49 price points for the iPhone 3GS and HTC Inspire.

The Xoom, however, had mountains of pre-release hype and a bevy of features superior to the iPad. But when a rushed release contributed to early bugs and an exorbitant cost that effectively priced it out of the market, the Xoom never had much of a chance to usurp Apple's tablet throne.

As such, Faucette cuts his 2011 revenue forecast for Motorola to $12.2 billion from $13.7 billion. Profit projection is hit hard as well, going from 94 cents to 64 cents. Faucette also has a grim forecast for 2012 -- changing previous estimates of $15.3 billion and $1.73 to $13.6 billion and $1.10. Motorola could even see worse roads ahead, Faucette says, unless it can "quickly adjust and refresh its product portfolio."

Or, you know, release a decent tablet that doesn't cost as much a superior laptop.

(See also: Apple iPad Will Fail, Says Dell Exec and Infographic: Apple's iPad 2 Compared to Motorola Xoom and HP TouchPad)
POSITION:  No positions in stocks mentioned.