Smartphone Set for Holiday Price War

The smartphone price war is in high gear as carriers and vendors roll out a series of major price cuts as the holiday shopping rush approaches.

Most recently, T-Mobile came out with news of what it says is the first U.S. prepaid BlackBerry — the Curve 8520, as part of a new plan called T-Mobile Complete.

Under the terms of the Complete package, users choose from four handsets priced at $59.99 and up and get the first month of service free, then select from a range of unlimited plans that cost $50 and up.

One of the Complete devices is the BlackBerry Curve 8520, which T-Mobile claims is the first pay-in-advance BlackBerry available in the U.S.

T-Mobile is the nation’s fourth-largest carrier, with 33.5 million subscribers, behind Verizon with nearly 90 million, AT&T with about 82 million and Sprint with about 48 million.

Despite the lower customer base ranking, T-Mobile has earned a reputation as a pioneer in the sector by bringing the first smartphone running Google’s Android mobile software to market and still sells more Android phones than its competitors.

Still, the carrier recently suffered some setbacks due to the Sidekick data loss fiasco and, more recently, the incident in England where users’ data was sold to third-parties by company staff.

T-Mobile, however, remains hopeful that the holiday season will bring lots of cheer in the form of smartphone sales, predicting the high-end devices to comprise 40 percent of fourth-quarter sales.

Meanwhile, Amazon (NASDAQ: AMZN) dropped the cost of the Palm Pre to $79.99 with a two-year plan from Sprint (NYSE: S) and is waiving activation fees. If that’s still too pricey, consumers can scoop up the smaller, entry-level webOS handset, the Pixi, for $24.95.

These price points compare to $149.99 for the Pre and $99.99 for Pixi from carrier Sprint and $199 for the Pre at Walmart.com

News of slashed smartphone prices and incentive plans come as carriers and vendors unveil fresh portfolios of devices for the fourth quarter aimed at capitalizing on the lucrative high-end handset sales trend.

Vendors are lining up their promotions around service contracts as well as handsets, as each vendor has an exclusive handset to call their own. In the case of T-Mobile, it sells the Android powered myTouch, Motorola Cliq, Samsung Behold II, and BlackBerry Bold 9700 with Wi-Fi, the first 3G-powered BlackBerry smartphone available through T-Mobile, and also the first smartphone from Research In Motion that includes built-in support for both 3G connectivity and voice calls over Wi-Fi.

Sprint is the sole carrier for the Palm Pre and Palm Pixi and also offers the Android HTC Hero and Samsung Moment as well as several new BlackBerry devices.

AT&T remains the exclusive carrier of the iPhone 3G and 3GS while Verizon has a pair of exclusive Android phones; the Droid and Eris by HTC, the Storm2 from RIM and several other BlackBerry models.