Motorola Mobility on Wednesday announced the forthcoming release of a Wi-Fi-only version of its Xoom tablet. The tablet is expected to be released in the United States on March 27 and will cost $599.

[ad#Google Adsense 300×250 in story]The Motorola Xoom is considered by some industry experts and analysts to be the best frontrunning competitor against Apple’s iPad 2. The device, which just began shipping last month, sports a 10.1-inch widescreen touch display and uses Google’s Android 3.0 “Honeycomb” operating system. It comes with 32GB of on-board storage capacity and a memory card slot for additional expansion.

The current model also supports 3G data communications over Verizon Wireless’ network. However, priced at an unsubsidized $799 ($599 with two-year commitment to Verizon), the Xoom’s price competitiveness against the iPad 2 has been lackluster at best.

By comparison, the 32GB iPad 2 with 3G communications via AT&T or Verizon cost $729, and neither Apple nor its carriers require users to agree to a long-term commitment. But at $599, the Xoom Wi-Fi comes in line with the 32GB Wi-Fi-only iPad.

Apple’s still the price leader with a 16GB Wi-Fi version priced at $499. Motorola’s yet to counter with any announcement of a lower-priced, smaller-capacity Xoom.

Motorola anticipates making the Xoom Wi-Fi available through Amazon.com, Best Buy, Costco, RadioShack, Sam’s Club, Staples and Walmart locations nationwide.