Everybody is getting hung up on the price of this device, which I admit is high, but a comparison to the iPad's price is not fair. As stated below, the closest iPad is $730. Also the hardware is a generation and a half ahead of the iPad. The iPad doesn't even have a camera, very basic need for any kind of video conferencing (Xoom comes with 2). Please see the comparison chart [1] for more details.
But yeah, having to buy the Xoom from a carrier and paying atleast one month of data plan rate before cancelling it is kinda ridiculous.
You can’t buy a $500 Xoom. It’s just not possible. I think that matters a lot, I doubt many people will check specs.
Edit: To expand a little on this point, Apple sold 7.33 million iPads in the holiday quarter and made $4.4 billion in revenue which means that consumers paid about $600 (±$8) on average for an iPad. Considering that, I don’t think it is a wise idea to not at least have a base model that is priced at $600 or less.
Why a generation and a half ahead? Is it so that when the iPad 2 is released (in a couple months), one generation ahead of the first iPad, you'll say the Xoom is still 1/2 generation ahead of the iPad2?
You're also missing the fact that the XOOM has 1 GIGABYTE of RAM. The iPad has 256mb of ram. The XOOM also has a DUAL CORE PROCESSOR. There are so many hardware differences between the two devices :)
But yeah, having to buy the Xoom from a carrier and paying atleast one month of data plan rate before cancelling it is kinda ridiculous.
[1] http://static.skattertech.com/media/2011/02/infographic-play...