The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage. The opinions expressed are those of the author and do not represent the views of TheStreet or its management.

NEW YORK (

Trefis

) --

Motorola Mobility

(MMIWI)

has now entered the tablet market and is expected to launch the Xoom tablet in Feb. 2011. According to IDC, the tablet market is expected to grow from around 45 million in 2011 to 71 million in 2012, with players like

Apple

(AAPL) - Get Report

,

Research in Motion

(RIMM)

,

Samsung

,

Dell

(DELL) - Get Report

and

LG

posing the biggest threat as competitors to Motorola Mobility.

We estimate that tablets constitute around 20% of the Motorola Mobility stock. However, if Motorola can create more success with tablets than our forecast, there could be upside to our $25.45 Trefis price estimate for Motorola Mobility stock, which is about 16% below the current market price.

Xoom will be the first tablet on

Google

(GOOG) - Get Report

Android's newest version 3.0, called Honeycomb, which is specifically designed for tablets. It will have some attractive features like support for big screens (7 inch to 9 inch), a totally new user interface, extensive multi-tasking and multiple home screens among other features.

DigiTimes expects that around 700,000 to 800,000 Xoom tablets will be sold in the first quarter of 2011 itself. We expect around 4 million tablets to be sold by Motorola in 2011, and we estimate that this number could increase to around 8.5 million annually by the end of Trefis forecast period, which could be a conservative estimate.

This growth is slower than the overall tablet market (as predicted by IDC), which means that Motorola's tablets could represent around 30% by the end of 2011 and decline gradually as more competitors enter the fray. We expect that other big players like

Cisco

(CSCO) - Get Report

,

Toshiba

and

HP

(HPQ) - Get Report

will also enter the tablet market, in addition to existing players Apple iPad, RIM Playbook, Dell and LG. These in addition to Apple's iPad 2 will create further pressure on Motorola's future market share.

However, there could be an upside of around 10% to our estimate for Motorola Mobility stock if the tablet unit sales increase at a faster rate to reach 12 million by the end of Trefis forecast period.

Motorola Mobility's Tablet Pricing

Xoom is a 10-inch tablet with support for 3G and 4G network and comes with higher specifications than the iPad in terms of RAM. It also features front and back cameras, which the iPad does not have. Motorola Xoom is expected to be priced at $700 and so is considered a high end tablet.

However, according to the fourth-quarter 2010 earnings conference call, management also indicated that Motorola will come up with 7 to 11 inch tablets and some versions will have only Wi-fi ability while some will have 3G or 4G access as well.

The tablets with lower screen size and that have Wi-Fi only access will be lower priced than Xoom. Due to this reason we believe the average tablet pricing should be around $550 for Motorola. Increasing competition in future could force Motorola to reduce tablets pricing further, and we expect that it could decline to around $410 by the end of Trefis forecast period.

However, if Motorola is able to control its pricing declines, and if the tablet pricing declines slowly to reach around $500 by the end of Trefis forecast period, there could be an upside of 5% to our estimate for Motorola Mobility stock.

You can see the

complete $25.45 Trefis Price estimate for Motorola Mobility stock here

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.