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Palm Pre sneaks in ahead of Apple show, with June 6 launch

By CAROLINE GABRIEL

Published: 20 May, 2009

READ MORE: Apple | Palm

Palm could not have chosen a better date finally to ship its flagship handset, the Pre - June 6, better known as D-Day. It is certainly D-Day for the device maker, which has squandered most of the excitement generated by the launch of the Pre almost five months ago, in a long-drawn out wait for a launch date and pricing. Now it must rekindle that buzz around a handset that is truly make-or-break for its vendor, just two days ahead of the Apple conference at which new iPhone software, and even possibly devices, will grab the limelight.

The Palm Pre will be available from June 6 in the US, priced at $199.99 with a two-year contract, including a $100 mail-in rebate. This is the same price as the 8Gb iPhone and $100 cheaper than the $16 version. The phone will launch exclusively with Sprint Nextel, which is almost as desperate for the product to succeed as Palm is, and will be available through the cellco's own stores plus Best Buy, Radio Shack and a few Wal-Mart outlets. Customers have to take out a Sprint Simply Everything or Business Essentials plan with messaging and data, ranging from $70 to $90 per month.

Bell Canada will have the launch exclusive for Canada, though may appear there later in June. No other operator deals have been announced despite reports of a bidding war with various European cellcos including Vodafone and Telefonica. This may be because of failure to agree terms - European carriers will expect to offer a lower price tag, and even 100% subsidies, and so will be haggling on price. Or it could be down to the much rumored component shortages that might be limiting Pre supplies in the early months.

Because of these supposed supply problems, this may be a 'soft launch', and Sprint CEO Dan Hesse has already said there could be shortages "for a while" (which, as Apple knows, can actually increase a product's desirability if managed well). Paul Coster of JP Morgan is expecting the soft approach for other reasons. He wrote in a research note this week that Palm will have to build up its launch momentum slowly because its balance sheet does not support a more aggressive approach.

However, this would assume that Palm was getting limited help from Sprint with the launch marketing, even though the operator, with its own challenges in stemming subscriber losses, needs to ensure the Pre is a big success during the period of its exclusive (which could last only to the end of the year). Speaking at the Mobile World Congress in February, Palm CEO Ed Colligan said that Sprint would make "a significant investment" (ie subsidy) into the price of the Pre. Such comments, though, are tempered a little by recent ones from Hesse, who said Sprint would not be launching a major advertising campaign for the Pre early on, noting that he believed demand was already there.

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