Sprint to offer Palm Pixi, Pre price cut

Wed, 09/09/2009 - 8:15am
Monica Alleven, Wireless Week

Palm today announced the Pixi, the latest addition to the webOS lineup, which will be available exclusively on Sprint in time for the holidays. No doubt, Sprint is hoping the Pixi news overshadows yesterday’s case of the mistaken Palm Pre pricing.

The slick-looking Pixi features a thin design, a full keyboard and personalization fashion options. Palm CEO Jon Rubinstein says the Pixi brings the webOS experience to a broader range of people who want enhanced messaging and social networking in a design that lets them express their personal style.

Palm also introduced the Palm Pixi Artist Series, designed by artists, that includes limited-edition back covers that users can change to suit their mood. Palm is showcasing the covers this week at the Mercedes-Benz Fashion Week in New York.

Palm PixiAs for the Pixi pricing, that hasn’t been announced yet. The companies say the pricing information will come closer to when product availability is announced – similar to how they announced it for the Pre.

The companies did, however, announce the Palm Pre is now available for $149.99 with a two-year Sprint agreement and after rebates. That follows a bit of a debacle yesterday after Sprint posted a $100 Pre price cut on the Web, only to take it down after discovering it was an error. The real price cut is closer to $50.

Sprint spokesman James Fisher says the $100 cut was the result of some internal miscommunication; the offer was removed, and the company is honoring it for those customers who grabbed it for the hours it was in effect.

Analysts at Pali Research, for one, say they’re not going to forget about the Pre pricing glitch. “Yesterday’s mistaken $100 price cut on the Pre a day before an actual $50 price cut did not support its own cause with investors, which are already quite skeptical of whether CEO Dan Hesse can improve the subscriber losses,” analyst Walter Piecyk wrote in a blog post today.

However, Piecyk added, today’s new exclusive relationship with Palm for the Pixi and renewed speculation about its possible sale to Deutsche Telekom could cause investors to quickly forget yesterday’s debacle. “We won’t,” he added.

Pali Research estimates that weekly sales of the Pre have settled in at more than 30,000, but Pali says the company continues to be “wasting an opportunity” to take more advantage of the unique product. “The only mistake was not offering this [$100] price cut to all customers and not including a simultaneous marketing push.”

The Pixi's release marks Palm's second attempt in less than a year to use new software and streamlined designs to lure consumers in the still small but fast-growing smartphone market, which is dominated by Apple's iPhone and Research In Motion's BlackBerry devices. According to market research firm NPD Group, smartphones made up 28 percent of consumer cell phone purchases in the second quarter, up 47 percent from the same period last year.

The Pixi also offers Sprint – which has been bleeding subscribers to other carriers – another opportunity to attract new customers and get current ones to "trade up" from regular cell phones. Despite the Pre's availability, Sprint reported a net quarterly loss of 257,000 subscribers in the second quarter.

Like the Pre, the black, shiny Pixi will come with a touchscreen, full Qwerty keyboard. It will also have 8 gigabytes of built-in memory. But while the Pre's keyboard slides out from the bottom of the device, the Pixi's slightly smaller screen and keyboard both fit on the face of the candy bar-style handset.

The new smartphone is longer and slimmer than the Pre, and, at nearly 3.5 ounces, lighter. It trades the Pre's center button for a tiny touch-sensitive bar that sits between the screen and keyboard. As on the Pre, the real estate between the screen and keyboard also will be touch-sensitive for navigating the device.

The Pixi will sport a 2-megapixel camera, instead of its sibling's 3-megapixel version, and two small speakers rather than the Pre's single large one.

Building on an already available webOS feature, the Pixi will be able to gather users' contacts from Yahoo and business-networking site LinkedIn. The Pixi will include standard smartphone features like GPS, video and music players, and a Web browser, but it won't have Wi-Fi.

A dedicated Facebook application will be released with the Pixi, Palm said. It is not yet clear if it will come loaded on the phone or will be available through Palm's online application store.

Shares in Palm dropped 61 cents, or 4.1 percent, to $14.37 in morning trading Wednesday.

– AP Technology Writer Rachel Metz contributed to this report

More Broadband Direct 09/09/09:
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•  NDS brings pre-paid option to TV
•  Thomson connects IP to 3G, expands VoIP options
•  Tek announces tester for IP network QoS
•  Goldman cautious on pay-TV services
•  Sprint to offer Palm Pixi, Pre price cut
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•  Vt. threat to pull telecom's license 'not a bluff'
•  Broadband Briefs for 09/09/09



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