Honeycomb tablets shut off before opening up
The flagship Honeycomb tablet, Motorola's Xoom, hasn't generated much interest in the premise of Android 3.0 being open, instead being ridiculed for its price, incomplete software and missing features it was advertised to have.
The company is reported to be sharply reducing manufacturing orders for the new tablet, with sources blaming its tapered off production on "the unclear market status of iPad-like tablet PCs."
Meanwhile, Motorola is also reported to be working on its own Android OS alternative, motivated by problems related to Android's platform fragmentation, issues with product differentiation and "issues related to Google's support for its partners."
Samsung has delayed its own plans to release a Honeycomb tablet after deciding that its original design was "inadequate" compared to the new iPad 2. It hopes to have its thinner models available by June.
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The real reason the Xoom hasn't taken off? There isn't a wifi only model available yet. Not having a wifi only model ready to go from the start was a big mistake. I don't expect the Xoom to ever sell like the iPad does, but if it had a wifi only model at a lower price without needing a data plan it would be doing quite a bit better.
I doubt that Motorola is leaving Android anytime soon for their own "in house" OS. The only reason they are still in business today is because of Android and dumping it for their own OS without any application support would be a suicidal move.