Palm Pre Gets Its Price, Due Date

Palm Pre

It’s official: The long anticipated, closely watched Palm Pre goes on sale in Sprint stores, Best Buy, Radio Shack and Wal-Mart on June 6, and carrying a $199 price after a $100 rebate and two-year service contract.

The announcement from Palm and Sprint ends months of speculation over the launch date of Palm’s (NASDAQ: PALM) make-or-break Pre smartphone, and Sprint (NYSE: S) executives are wasting no time positioning it as the new darling of the market.

In what appears to be a subtle jab at rivals Research In Motion (NASDAQ: RIMM), whose BlackBerry dominates the enterprise, and Apple (NASDAQ: AAPL), whose iconic iPhone is wildly popular outside of the office, Sprint CEO Dan Hesse said the Pre will meet the needs of both the lifestyle and business customer.

“The argument that you need one phone for work and another phone for play, or that you have to make compromises between business and lifestyle productivity, is over,” Hesse said in a statement. “With Pre, compromises of the past are history.”

Palm first presented the Pre at a trade show in January, saying it would be out by mid-year. Since then, industry watchers have been waiting for the introduction of the smartphone, which has generated buzz as a potential “iPhone killer.”

Notable elements of the Pre include webOS, its new operating system that includes enhancements like the “Deck of Cards” design that lets a user scroll through applications and toggle between them without having to open windows, and support for continual information updates in real-time. The user also interface centralizes e-mail accounts, contact and calendar information, and the phone itself boasts a full slide-out keyboard in addition to a color touchscreen display.

So far, the embattled handheld pioneer is being lauded for delivering on its launch promise on time and at a competitive price point.

“The pricing is really in the sweet spot as far as smartphones go, so they’re right in the zone with that,” Ramon Llamas, mobile analyst at IDC, told InternetNews.com. “Way back in January, Palm told us this would be out in the first half of the year, and so congrats, really — because if you’re bringing a whole brand-new product out, to get all the moving parts to come together and do all the testing and meet the deadline, that’s monumental, and shows they have a good internal mojo going.”

Much has been said about whether it’s prudent for the Pre to go on sale so close to Apple’s upcoming Worldwide Developers Conference (WWDC) — which begins June 8 — since it’s widely expected that new iPhones may be announced during the event.

[cob:Special_Report]Still, Llamas thinks Palm has gained an edge in the smartphone market by being the first company to have its signature new product on sale this summer.

“It’s inevitable that there will be comparisons drawn one way or another, and with Apple as the incumbent, people have been deferring to their timetable,” Llamas said. “But first, we don’t know that anything will be announced at the Apple conference.”

“Second, if there is news, it will be just that — an announcement. They won’t have product out on the shelf,” he said. “I think it’s good for Palm to be on the attack instead of playing defense, because if you’re out first, then you become the device that everyone is comparing to.”

Others, however, weren’t as thrilled by the timing.

Page 2: Looking ahead to apps

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“The pricing is competitive, though it leaves the door open should Apple launch a lower-priced iPhone,” Avi Greengart, mobile analyst with Current Analysis, told InternetNews.com. “I would have preferred a mid-May launch to get the launch window to itself; the launch timing just two days before Apple’s WWDC is unfortunate.”

“However, the Palm Pre is differentiated, both in terms of carrier and device experience,” he added. “There is plenty of room in the market for the Pre in addition to the iPhone, BlackBerry, and everything else on the market.”

Others agreed that the Pre is likely to be successful — but won’t enable Sprint and Palm to rest

“I think they should have had a higher storage model given the drop in price of flash,” Gartner analyst Ken Dulaney told InternetNews.com. “Aside from that, the biggest thing going for the Pre is that it’s the best smartphone at Sprint. We have said for a long time that this wouldn’t bring over many customers to Sprint but would help keep customers who have been bleeding to other carriers.”

“So the product will be successful, I believe, but it will need to be followed quickly by a European launch and another carrier in North America,” he added.

IDC’s Llamas also applauded how Sprint’s marketing is dovetailing with the launch of the hardware.

“I also love Sprint’s Now Network commercials, I think they’re hot, pretty slick. It paints Sprint as more of a stand-out than being a ‘reliable’ network or the ‘largest’ network — it’s ‘now’ and by the way, you can get the Pre now,” he said.

Meanwhile, he and Dulaney both said that one missing piece critical to the successful launch puzzle for the Pre is in the applications component.

“We’ve got almost everything in place, but I have not seen any hint of cool new applications,” Llamas said. “As far as I’ve seen, there’s no hype around the app factor, you have to search for the store, and when you do find it, there’s one for Windows Mobile.”

“Pandora and Facebook are there, and those are great apps, but you really need more than just two — they’re practically driving the marketplace after a certain point, and I’m not at all clear on how Palm will bring webOS apps out and how that will pan out,” he added.

Dulaney offered a handful of scenarios for how Palm can compete in apps — none of which will be easy if the firm truly wishes to compete with the Apple iPhone’s blockbuster App Store and new app marketplace efforts from Microsoft, Google’s Android and Research in Motion.

“One, Palm does their own store, but the problem is that Palm doesn’t have the money Apple has to do this alone,” he said. “Two, Sprint does the app store, but the problem there will be that every operator will have their own app store, causing fragmentation, and also … the operators don’t do well doing their own app stores.”

“Three, someone outside does the app store,” he added. “This could be Google or even Qualcomm with their recent announcement of their Plaza Retail app store offering. Google would be great. Qualcomm has never been a raging success at App Stores. This would be the best option, but it depends on who does it.”

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