Could Palm Pre Bubble Pop As Apple Squeeze iPhone Prices?

Ironically, it is not Apple's new iPhone 3G S smartphones which will likely to end Palm Pre's brief period as Apple's main contender but the older generation which is now available for only $99.

The old 3G iPhone is good enough to match the Palm Pre and, as MG Siegler from Techcrunch posits, it is Apple's secret weapon to dominate the smartphone market.

Most importantly for the rest of the world who will get the Palm Pre up to six months from now, the iPhone 3G is available now and the price cuts may take place as early as next week. It is likely that the old iPhone could drop to less than £30 per month, offering 600 mins, 500 texts and unlimited internet on a 24 months contract.

It is not surprising therefore that Palm's share price has dropped by 6.46 percent even before the new iPhone announcement and fell by another 0.90 percent in after hours trade, partly over concerns about low supplies.

Palm is still from its 52 week low of $1.14 but depending on how well the Palm Pre or the old iPhone 3G sells, the beleaguered company could well be heading for very hard times.

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Our Comments

There's not much to differentiate the old iPhone and the new one except for four features. Whether punters will fork an extra $100 for extra RAM, Storage, better camera and faster internet remains to be seen.

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Palm, Inc. (Public, NASDAQ:PALM)

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