Motorola Stock Downgraded By RBC Analyst

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It’s not any secret that Motorola’s pricey tablet, the Xoom, hasn’t been selling well. Opinions have been mixed, both from the tech blog circles and industry analysts, on how it will affect Motorola. One guy is making his opinion clear. Mark Sue of RBS Capital Markets is slashing the target price for Motorola Mobility’s stock. He now calls for a stock price of $33 and also has slashed the sales forecasts for the company.

Via tech blog BGR, Sue writes to investors that he believes Xoom will sell just 300,000 units, down from the 400,000 that it was originally forecasted to sell. Despite the WiFi-only models of the Xoom coming out in just a few days, Sue predicts that Verizon (which is the only place you can get the 3G Xoom) will shift their marketing focus from the Xoom to the HTC Thunderbolt (their first 4G phone) which will just stick the Xoom further in the proverbial mud.

I reviewed the Xoom for this website a month or so ago. It’s an extremely capable, but expensive device. I found the Honeycomb software great, although it did have a few minor issues. The value proposition for the 3G version of the device on Verizon ($600 on-contract/$800 off-contract) is probably way too expensive for most consumers. It looks like the WiFi-only version of the Xoom will start at $600, which is a much better starting point for the device.

As mentioned, the general consensus is that the Xoom isn’t doing well, and there are even reports that Motorola is cutting production of the Honeycomb tablet in an effort to control costs.

Have you tried the Xoom? What do you think?