Why Android Honeycomb Tablets Aren?t Hot ? Yet

Motorola's Xoom -- the first Honeycomb-powered tablet device to hit the market -- isn't selling as well as Apple's iPad. Photo: Jon Snyder/Wired.com

Nvidia’s head honcho knows that sluggish sales of Android tablets are a problem, but says it won’t be that way forever.

“I think that the vast majority of tablet users are actually buying from retail, and Wi-Fi only,” said Nvidia CEO Jen-Hsun Huang on a quarterly earnings conference call with reporters, explaining why sales for Android-powered tablets have been lackluster so far. But, he explained, you couldn’t buy Wi-Fi-only versions at retail outlets. “The first generation of tablets initially came out from our carriers, and with 3G,” said Huang, whose Nvidia Tegra 2 processors can be found inside multiple Android tablets currently on the market.

Despite a wealth of options from different hardware manufacturers, Android-powered tablets don’t have the same momentum as the iPad. Apple’s tablet still accounts for 82 percent of the tablet market, according to Nielsen.

Huang’s statement places much of the blame squarely on Motorola’s release strategy for the Xoom, Google’s flagship tablet product running Android’s tablet-optimized version 3.0 (Honeycomb) software. The Xoom debuted on Verizon’s 3G network in February for $600 with a two-year Verizon contract, or without a contract for a whopping $800.

And some say that’s not the way we want to buy our tablets. “Our data shows that [people] don’t want to be tied in to a fixed data contract, and they don’t want to buy from a carrier,” wrote Forrester analyst Sarah Rotman Epps in a blog post. “Meaning that pricing strategies that work for mobile phones won’t work for tablets.”

Apple’s baseline, Wi-Fi only version of the iPad 2 costs just $500.

Take a look at some of the raw numbers for the sake of perspective: In the first weekend of the original iPad’s release, Apple sold more than 1 million devices. Compare that to the 220,000 units shipped in the Xoom’s first month of release.

Last month, Motorola’s CEO Sanjay Jha cited a different reason for the Xoom’s relatively poor sales: Android’s app ecosystem. “Consumers want more apps for Android tablets,” Jha said during the company’s quarterly earnings call in April.

Huang agreed with Jha to a degree. “It’s a software richness-of-content problem,” Huang said in an interview with Cnet.

The forecast for Android-powered tablets to come in 2011 isn’t entirely grim. Huang — whose company certainly has skin in the game — remains optimistic. “We’re going to expect another wave of tablets that are coming out to the marketplace now. Ones that are even thinner and even lighter than the best offerings from any place,” Huang said, most likely referring to Samsung’s soon-to-debut Galaxy Tab 10.1.

Huang is also betting big on the new version of Honeycomb released for Android tablets (3.1), currently available only for the Motorola Xoom tablets but will roll out to other Android tablets in the next few weeks. The update includes support for peripheral USB devices and user-interface enhancements, among other improvements.

And finally, Huang hinted at Nvidia’s integration with Google’s software: “We’re working very closely with [Google's] teams on the Ice Cream Sandwich,” Huang said, though he wouldn’t go into further detail. Google teased details of the upcoming Android software version, codenamed “Ice Cream Sandwich,” at its I/O developer conference in San Francisco last week.

As for issues with Android’s app ecosystem, Google seems to be trying to remedy the situation. The company recently added a number of lists and sections highlighting the most popular apps across specific categories — gross sales, number of downloads over a seven-day period, top free apps downloaded — in an attempt to make the market easier to browse for consumers, as well as a more lucrative venue for developers who want to sell their apps.