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Operating Systems

Why the Palm Pre must launch at $149

Sprint will be announcing the pricing and availability for the Palm Pre any day now--and it will most likely match the price of the iPhone at $199. But David Carnoy argues that may not be good enough.

Ever since Palm trotted out the Pre at CES in January there's been a lot of speculation over what price tag Sprint would slap on its smartphone savior when it finally came out this spring. Initial reports pegged the Pre at $399. But that high price was quickly downplayed as a nonsubsidized, sans contract version. As we wait for official pricing--an announcement could come any day--the pundits seem to have settled on the $199 to $299 range as the likely number. But I'm here to tell you Sprint has to do better. It has to break $199 and preferably hit $149.

Obviously, when it comes to the Pre, Sprint's big problem is the iPhone, which is due for another upgrade in June. The base iPhone is currently $199 and an even cheaper entry-level model may be on the way. At the same time, you've got T-Mobile's $179 G1 with Android and RIM bringing out sexier, more consumer-friendly BlackBerrys.

Sprint's service plans for the Pre appear to be very similar to those of the iPhone, which means it's highly likely Sprint will release the Pre at $199 ($299 would be suicide). Sprint has already announced that individual Pre plans will come in three flavors: you'll pay $69.99 per month for 450 minutes, $89.99 per month for 900 minutes, or $99.99 per month for unlimited talk, with each plan including unlimited data. Meanwhile, the iPhone's base plan currently starts at $69.99 with 450 minutes and unlimited data. AT&T's 900-minute plan goes for $89.99. Where you save with Sprint is if you go with the unlimited plan, which currently costs $30 more with AT&T. (None of these prices includes taxes, of course).

Personally, that doesn't sound all that enticing. As I wrote recently, I'm a Sprint customer who owns a Windows Mobile phone (the Mogul) and has a two-year contract that expires in June. I should also point out that my current service plan (with unlimited data) is about $15 less than what a new plan with the Pre would cost me.

Call me crazy, but I actually like Sprint and would prefer not to switch because I think it's a better carrier than people give it credit for (and there's no great love out there for AT&T). I also appreciate that I don't have to worry--at least not yet--about restrictions on tethering (using my Mogul as a modem) or streaming my Slingbox to the phone using Sprint's 3G (and soon 4G) network.

But facts are facts and numbers are numbers. Why would I buy a first-gen Pre over a third-gen iPhone with a huge, mature App Store if their prices and cost of ownership were identical outside the "unlimited" plan? I don't hate AT&T that much (my wife actually has a BlackBerry Curve from AT&T) and while I've been a loyal Sprint subscriber for more than 10 years, I'm not that loyal.

Nobody is. Which is why Sprint will get some switchers during the period (through 2009) that it has an exclusive on the Pre. There are still hardcore Palm fans out there and lots of iPhone haters. But at $199, I don't think you're looking at game-changing numbers, especially if AT&T counters by lowering the price on the 16GB iPhone--or lowering the price for its unlimited plan.

The Pre at $149.99 may not be a game changer for Sprint either. But at least $149.99 gives it a fighting chance.

What do you think?