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Pricing wars: Palm Pre vs. iPhone 3G

Crave compares the data plans for the Palm Pre on Sprint and the iPhone 3G on AT&T and see which one offers the better deal.

Bonnie Cha/CNET

By now, most of you know that Palm and Sprint finally announced that the Palm Pre will be available nationwide on June 6 for $199.99 after a $100 mail-in rebate and with a two-year contract on Sprint's Everything Data plan or Business Essentials with Messaging and Data plan.

The Pre's price was one of the key pieces of information missing when I did a basic comparison of the Pre and iPhone 3G (with OS 3.0) back in March but now that we have it, I thought it'd be a good time to revisit the topic and do a comparison of the data plans and overall cost to the customer. After all, as important as the features are to the user, I'd argue that people are just as concerned about getting the best value for their money.

A couple of months ago, my colleague David Carnoy wrote a column stating his case about why Sprint must price the Pre at $149. The $199 price tag puts it on the same playing field as the iPhone (going on the basis that we're comparing the 8GB iPhone), but a more aggressive $149 price point would have to given the Pre an edge over the iPhone and the $179 T-Mobile G1.

Clearly, Palm and Sprint didn't listen, but that said, I think the price is fair. Yes, the mail-in rebate is annoying, but $199.99 is reasonable for what you're getting and with its line with the competition. Also, I have to disagree with David on one point and say that Sprint offers a more enticing data plan, in my opinion.

Let's compare. Just as an example, an individual Sprint Everything Data Plan starts at $69.99 for 450 minutes and unlimited text messages and unlimited data, including the carrier's various services, such as Sprint Navigation and Sprint TV, which are both supported on the Pre.

Corinne Schulze/CNET

On the other hand, AT&T first requires a $30-per-month data plan and then it's $39.99 for 450 minutes (with rollover minutes) and $20 a month for unlimited text messaging, so you're looking at a total of $89.99 and you don't even get the extra services. The $20 difference adds up to quite a bit of savings over the months if you're a Sprint customer.

Will that be enough to win over customers from other carriers? Well, that remains to be seen but like the BlackBerry Storm, I believe there's enough interest and excitement built up from when the Pre was first announced at CES 2009 that initial sales of the smartphone will be swift and steady.

Of course, the question remains whether the Palm Pre will actually live up to all the hype in terms of functionality and performance and continue to grow sales over the months. As we've said in the past, as much as Palm needs the Pre, the smartphone is just as important to Sprint, which has trailed the other carriers in iconic devices.