The 3G version of the Motorola Xoom is already in stores, but a cheaper, Wi-Fi-only version will soon be on the way. Motorola announced today that the Xoom Wi-Fi will officially be available on March 27 at a number of U.S. retailers including Amazon.com, Best Buy, Staples, and Walmart. 

Whereas the Xoom 3G (soon to be 4G) starts at a lofty $799 without contract ($599 with contract), the Xoom Wi-Fi will start at $599 with no strings attached. That price tag gets you a 10.1" tablet running Android 3.0, a 1280x800 screen resolution, dual-core processor and 32GB of storage space. That pricing also puts it in direct competition with Apple's 32GB iPad 2 (Wi-Fi-only model).

There is no word on whether Motorola will introduce an even cheaper 16GB Xoom at a later date to go head-to-head with Apple's 16GB iPad 2.

“MOTOROLA XOOM is a truly innovative tablet – its design, coupled with being the first tablet to have Android 3.0, results in a user experience that is one-of-a-kind,” said Dan Papalia, vice president of retail sales for Motorola Mobility. “We are now continuing to expand the choices available to consumers with the MOTOROLA XOOM Wi-Fi to be available soon from numerous leading retailers in the United States.”

Hopefully this cheaper variant of the Xoom will help to spur sales. Analysts are already reporting that Xoom sales are "underwhelming" compared to the overachieving iPad 2.