Google Inc. 's Motorola Mobility unit dropped the price on its flagship smartphone Wednesday, continuing its assault on the high margins of its smartphone rivals.

In a blog post, the company said its Moto X with 16 gigabytes of memory would now cost $399 without a wireless contract for U.S. customers, down from $550. The company offered the Moto X for brief periods in December at $349, but the latest price drop isn't a temporary promotion.

At $399, the Moto X will be significantly cheaper than Samsung Electronics Co. 's flagship device, the Galaxy S4, which costs $600 at Verizon Wireless for a 16-gigabyte model without a wireless contract. The Galaxy is the most popular high-end smartphone that, like Motorola's devices, runs Google's Android operating system.

Apple Inc. 's iPhone 5S, running on its own operating system, costs $650 at Verizonfor a 16-gigabyte model without a contract.

The price cut on the Moto X extends a strategy laid out by Motorola Chief Executive Dennis Woodside to undercut rivals. Motorola's lower-end Moto G phone, released in November, starts at $179 without a contract in the U.S., compared with $250 for a comparable Samsung device at Verizon .