Motorola takes on iPad with WiFi only Xoom-MarketWatch

By MarketWatch SAN FRANCISCO (MarketWatch) – Motorola mobility Holdings Inc. is launching a direct attack on Apple Inc. by Xoom her with the popular iPad tablet with a cheaper model that is expected to be more popular with consumers are more competitive.

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The WiFi-only version of Motorola's Xoom will let consumers access the Internet from their home wireless connections or when free wireless hotspots and costs $ 599 for a 32-gigabyte version, on an equal footing with Apple 's/quotes/comstock/15 *! aapl/quotes/nls/aapl (AAPL 330.01-15.42,-4.46%) iPad with the same amount of flash memory. See Motorola news here.

Motorola 's/quotes/comstock/13 *! mmi/quotes/nls/mmi (MMI 23.69, + 0.23, + 0.98%) first version of the Xoom costs $ 599 but it requires clients to sign up for a 2 year contract carrier, access the Internet through cellular networks and is sold by Verizon Communications Inc./quotes/comstock/13 *! vz/quotes/nls/vz (VZ 34.3057-0.,-1.63%) and AT&T Inc./quotes/comstock/13 *! t/quotes/nls/t (T 27.33, 0.48,-1.73%). The extra carrier contract is another $ 480 added to the cost, on a locked-in period of two years. Consumers can also buy a Xoom for $ 799, without a two-year contract, but still had to pay $ 20 per month for access to the Internet.

Therese Poletti/MarketWatch
Consumers drawn up in San Francisco last week to buy Apple iPad 2.

The popularity of Apple cheaper WiFi-only model revealed last week when the company launched its second generation iPad 2, a thinner model with more features such as a front-facing camera for video calls.

In San Francisco went Friday, lines at the Apple store in Union Square, where consumers the WiFi-only models, could buy around an entire city block. In contrast, the more-expensive version for the iPad on sale on the airlines, where lines were not seen most of the day. Just before the iPad 2 on sale at 5 pm, however, a short line formed in the Verizon store on Market Street. See column on Apple's WiFi-only advantage here.

Motorola's launch date of March 27, came as a pleasant surprise for investors, who raised her shares on Wednesday morning. The only cloud hanging over the news was the question of whether Motorola will be able to keep prices level with Apple. Apple Chief Operating Officer Tim Cook recently talked about how the hefty cash pile, the company can buy large quantities of parts to lock in cheap prices. That would apply to flash memory, whose price has risen since Friday over fears about the consequences of the earthquake in Japan the supply chain, where about 35% of the Flash is manufactured.

Consumers will probably welcome the news, as they now have a choice that is priced at par with Apple's iPad.

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