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Palm has been playing coy with any definitive details about time or money -- specifically, release dates or pricing figures -- regarding the Pre, the new smartphone it's promised to deliver in the first half of 2009. A new report from analyst firm iSuppli, however, could shed some light on the Pre's price as it relates to buyers and to Palm's own bottom line.
While Palm has declined to confirm Pre pricing, industry reports suggest that the handset could well debut at US$300 after rebates.
"Palm is not doing a ton of media at the moment -- instead focusing on getting the Pre out the door as soon as possible," Alexander Hunter, spokesperson for Palm, told TechNewsWorld.
Money Breakdown
iSupply recently released a so-called virtual teardown -- a detailed analysis of the components and costs it believes form the basis of the Palm Pre. Palm will get a 44 percent payoff on each unit it sells to Sprint (NYSE: S) after factoring in $22.61 for software licensing and royalty costs, according to iSuppli's estimates.
The new smartphone will cost Palm $138 in hardware, the firm said. Including software licensing and conversion costs, the grand total rings up to $170. That estimated hardware total includes $15.41 in baseband components. The multi-touch display -- which could be the most pizzaz-producing element of the Pre -- is expected to cost Palm another $39.51, according to iSupply.
The rest of the cost is spread among other must-have components for any mobile phone meant to compete with the existing big guns. For example, the 8-GB flash storage system presumably comes in at $15.96. A 3-megapixel camera would add about $12.39 to the package's cost.
Sporting Chance
Palm's decision to introduce a new product rather than reinvent an earlier one may hit its mark with consumers.
"It's not so much a question of viability as it is adoption. The world of smartphones is broken up between iPhone, BlackBerry and everyone else," Mark Asnes, COO of Wireless Zone, told TechNewsWorld. "Before BlackBerry was as strong as it is, Palm was it for both consumer and business users. Palm held onto the Palm OS too long and lost market share."
It remains to be seen whether the Pre can help Palm steal customers away from Apple (Nasdaq: AAPL) and Research In Motion (Nasdaq: RIMM). In addition, Palm has chosen to launch the Pre with a wireless carrier -- Sprint -- that loses as many customers as it brings in. This is not exactly a recipe for success, Asnes noted.
Another potential marketing factor is the possibility of a smaller version of the Pre, also running webOS. Palm is rumored to be developing the smaller handset for release in the fall, according to TechCrunch.
Market Draw Questionable
A big portion of the market for smartphones is youth the market, which may not embrace the Palm brand as readily as a brand like Apple. That is where the target market lies, according to Asnes.
"Customers that upgrade are just not going to leave Apple or BlackBerry. It's a good product with what looks like a good operating system built in a way to make it easier for developers to create applications, and that may help," he said.
However, the rumored $300 price point for the Pre, if it turns out to be true, would not help Palm's cause, Asnes warned. An iPhone 3G with 8 GB of data storage, for example, can be had for $200 with a contract, and that price has been in place for nearly a year.
"If you're not first or better, then you have to be cheaper. By the time this really hits the street, you will see price drops on others," he said.
New OS May Help
Consumer satisfaction with Palm's new operating system for the Pre could enhance early acceptance of the handset. The new phone will be the first product to run on Palm's webOS.
WebOS allows users to move their contacts, calendars and information wirelessly instead of being locked to a computer, according to Palm officials. At its core, webOS leverages several industry-standard technologies, including Web technologies such as CSS, XHTML and JavaScript.
Phone Features
The Pre allows users to link contacts from a variety of sources, including Outlook, Google and Facebook. Updating a contact on the webOS device will update in the other accounts.
The Layered Calendars feature lets users view a single calendar or multiple calendars layered in a single view. This provides a way to combine work, family, friends, sports teams and other interests. Users can toggle to look at one calendar at a time or see them all at a glance.
The combined messaging features is similar to the format used on Gmail. All conversations with the same person are displayed in a chat-style view, even if the conversation started via instant messaging and the reply is sent as a text message. Users can also see who is active in a buddy list right from contacts and start a new conversation with just one touch.
WebOS lets users keep multiple applications open and instantly flip
from one to another. The multi-touch interface allows movement between
activities like flipping through a deck of cards and rearranging items
simply by dragging them. Also, the OS narrows searches and offers
results from both the device and the Web.
