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When we discovered the Moto 360 Design Face-Off yesterday, we were overjoyed to see that the contest’s rules indicated that the Moto 360 smartwatch would cost $249. But later that day, Motorola itself has commented on the news in such a way that throws some doubt on the price.

In response to yesterday’s news, an Android software developer named Michał Tajchert said “That is a nice price!” on his Google+ page. A few hours later, however, the Google+ account for Motorola Mobility chimed in on his post:

“We want to make clear that the ‘Approximate Retail Value’ (ARV) indicated in our rules is included for tax purposes only and should not be interpreted as the suggested retail price of the Moto 360 when it becomes available for purchase.”

The company also updated its official rules to reflect their comments. After the $249 ARV, the rules now add “Actual suggested retail price at launch may be substantially different.”

It is not surprising that Motorola’s public relations team piped up after tech sites boldly proclaimed that the Moto 360 would cost $249. The company has yet to reveal the official pricing information or technical specifications for the device, and as such, wants to keep tight control of that information. But the real difference between the ARV and the MSRP – especially in the case of Motorola’s contest – is difficult to discern.

When reporting a prize on your taxes, a person is supposed to use the fair market value, or FMV, which is the amount that a seller could reasonably expect from a buyer in exchange for the product. In the case of game shows, for instance, prizes are awarded by third parties or sponsors, who purchase the goods that are given to winners.

But the sponsor of this contest is Motorola Mobility, not a third party. As such, the company should have full knowledge as to what the fair market value of the Moto 360 will be. Even though they seem similar, there is a definite difference between the ARV and the FMV: the ARV suggests the presence of variables that could change the final price of the prize when it is actually purchased. Because Motorola ought to know how much the Moto 360 will sell for when it launches this summer, there is no reason for the FMV to be different from the ARV in the case of this contest.

To make a long story short, Motorola may be casting doubt on the $249 price for the Moto 360 to give the company more pricing options when the device is finally released. But it seems unlikely that the final MSRP for the smartwatch will be much different at all.

 


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