Motorola XOOM drops price, relies on Android to grow market

by Kristen Nicole

Hot on the heels of the new iPad 2 launch, Motorola is planning to offer a Wi-Fi only version of its Xoom tablet complete with a price drop. Also, smartphone maker HTC will introduce its 4G-powered Thunderbolt on the Verizon network tomorrow.

Motorola Xoom Wi-Fi for $599

Motorola (MMI) has dropped the price on its Android-powered Xoom tablet, offering a Wi-Fi-only version for $599. You can’t get one until March 27th, however, when the 32GB device will be available at Amazon.com, Best Buy, Costco, RadioShack, select Sam’s Club stores, Staples and Walmart. It’s a well-rounded lineup of retailers for the Xoom tablet, which has made its mark as the first to feature Google’s tablet-specific Honeycomb operating system, Android 3.0.

When the Xoom tablet first came on the market, it was priced in line with the iPad, making a bold statement in more ways than one. Comparing its Android tablet to the iPad as a better device, Motorola gained the attention of pundits, but not so much from consumers. Product reviews and sales numbers failed to wow, leaving analysts to anticipate a price drop should Motorola expect to succeed in the competitive tablet market. RBS Securities analyst Didler Scemama notes an industry-wide interest in pushing tablet sales, even as chip maker ARM would be hurt from slowed tablet sales.

The price was right for Xoom competitor, the iPad 2, which starts at $499 for 16GB and Wi-Fi capabilities. With a growing number of personal cloud services supplementing smaller device hard drives, and wireless networks reaching 4G status, it’s no wonder tablet manufacturers are aiming for a pricing sweet spot. Even Apple (AAPL) has invested in its personal cloud stack, pushing MobileMe as a handy add-on for syncing content across your entire family of iOS devices. Google’s (GOOG) got its own collection of personal cloud tools, but this isn’t a direct profit mechanism for Android device manufacturers like Motorola.

HTC Thunderbolt 4G at Verizon

Expanding wireless networks, however, are still driving the mobile market at large. The long-awaited HTC (2498.TW) Thunderbolt launches tomorrow on Verizon (VZ), making it the provider’s first 4G smartphone. Available for $250 with a two-year contract, the Android-powered device boasts a 4.3-inch display, a kickstand, 768MB of RAM, running on a 1GHz processor. You’ve got front- and rear-facing cameras for live video chat, and all the other bells and whistles you’ve come to expect.