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Palm, Sprint relying heavily on the Pre

Posted at 22 May 2009 19:33 CEST by Randomus

The anticipated June 6 launch of the Palm Pre smartphone on the Sprint network could be the most important product launch for both companies. 

Under the hood, the Pre has a 3.1-inch screen with 320 x 480 resolution, 3-megapixel camera, 8GB internal storage with no expansion slots, and a 600MHz ARM CPU.  The phone measures 3.9 x 2.3 x .67 inches and weighs 4.7 ounces; smaller than the Apple iPhone, but about the same weight.

The phone will be available for $199.99 after a $100 mail-in-rebate and a two-year contract agreement on the Sprint Everything Data plan or Business Essentials with Messaging Data plans.

Palm has seen a fairly high level of interest for the phone, but no one is sure how many people will actually go out and buy a device from a struggling company on a struggling network.  Palm, a major competitor in the PDA phone market years ago, has struggled to adapt to increased competition from other manufacturers who are developing smartphones, including Research In Motion (RIM), Apple, HTC, and others.

The U.S. mobile service provider market is dominated by AT&T and Verizon Wireless, with T-Mobile trailing in third, as Sprint and others continue to lose subscribers.  Even though it offers decent minute and data packages, the company’s support and network coverage has left many subscribers disappointed.

I’ve chatted with people in the industry who said this could be the "unofficial D-Day" for both companies, and I agree that the Pre’s acceptance through the rest of 2009 is critical.  Even though Pre looks like a solid smartphone, the current smartphone market is extremely saturated with quality phones, such as the Apple iPhone, HTC’s G1, RIM BlackBerry, and other smartphones.

Another problem Palm faces is that Nokia, Acer and other companies also have new devices planned for consumers who may be new to smartphones.  Palm was the company known for smart devices a decade ago, but simply doesn’t have the same power to draw in interest any more.

I’m very curious to see how Palm ramps up marketing and advertising the phone immediately prior to June 6, and for the rest of the summer.  Both companies said supply may not be able to keep up with demand, and won’t heavily market the phone for some time, according to Sprint CEO Dan Hesse.

If the phone flops after release next month, I’m not sure how much faith will be left in Palm.  I remember reviewing the company’s products years ago with fairly good remarks, although that obviously doesn’t correlate to their current products.  I’ve owned several different Palm phones, and have lost a bit of faith in the company, but want to see what happens in the coming months.

Sprint is already losing subscribers — and will likely continue to lose subscribers — though that could be slowed down if the Pre takes off.  In Q2 2009, Sprint is expected to lose around 1.1 million more subscribers, analysts predict.

I’m currently a Verizon Wireless subscriber using a RIM BlackBerry Curve 8830, and have been thinking about switching carriers for some time now.  But the $199.99 initial phone price, two-year Sprint contract, and better phones at the same price point will convince me to steer clear of Palm’s anticipated phone.  I believe a $149.99 price point would make more sense, giving a cost advantage over other phones, but it appears Sprint & Palm aren’t willing to drop the price that low, at least initially.

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