Palm Pre Smartphone May Appear On Sub £25 Contracts

PDA-pioneer-turn-martphone-advocate Palm has managed to cut down the cost of its flagship smartyphone, the soon-to-be-released Pre, to a mere $138 according to market researcher iSuppli.

According to Businesweek, which published the iSuppli report, this is a lot less than what analyst firm thinks is the cost of the Blackberry Storm ($203) or the cost the G1 Android Phone ($144) or Apple's iPhone ($174).

Such a low price means that it could very realistically be sold for less than £25. The Storm is available at Vodafone for example for £30 on a 2 year contract. The iPhone goes for £34.26 for the same contract length, while you can grab the Android G1 on Combi 25 from T-Mobile for £30.

The touchscreen itself is the most expensive item costing a rather expensive $39.51, more than a quarter of the device's total cost, followed by the memory chip, the wireless hardware, the 3.2-megapixel camera module and the Texas Instruments OMAP processor.

The lower prices are apparently due to dropping prices which have depressed the BOM (Bill of Material). The estimate doesn't include costs associated with the development of the phone itself or its operating system but even then, Palm could well be on to a winner if the Palm Pre doesn't suffer from any significant issues.

The smartphone is set to debut on US-based network Sprint by the end of June 2009 where it is likely to fetch a $300 or $200 after a $100 subsidy. Bloomberg is also reporting that Palm may be stockpiling fewer than 400,000 Pre ahead of its launch, which is significantly lower than its main competitors'.

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Our Comments

The only networks selling Palm Gear currently is Vodafone which is selling the desperately lonely Palm Treo Pro, Blackberry lookalike. It launched last year for a whopping £399 but failed to become a popular model as the iPhone first, then Android and Blackberry models submerged it. Palm is betting its future on that single smartphone and should it fail, it will almost certainly be facing some very, very difficult choices before the end of 2009.

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