See, The Palm Pre Can Be Offered For Free

from the was-it-such-a-ridiculous-suggestion? dept

A little over a month ago, I suggested that Sprint and Palm were making a big mistake in not offering the Palm Pre for free (more specifically, saying that Sprint should subsidize the full price). I don't think I can recall a post where more people told me I was so totally wrong. People insisted it was the dumbest idea ever, and that it would harm the brand value of the Pre, while costing Sprint way too much money. Yet, I still stand by that claim. Sprint doesn't make money selling the phone, it makes it by getting people to sign up for at least two years of Palm Pre service -- which is on the higher end of the service scale. The Pre is not as good as the iPhone, and did very little to really stand out from the competition. So the way to get around that is to offer the device for free.

At least some people seem to agree.

The device is now being offered in the UK... exactly as I suggested: free with a two year contract. At the same time, through some tricky step following, you can actually get the device for free in the US as well. I don't see how that takes away from the prestige of the device at all. If anything, it's only going to help make it easier for some people to at least try it out as a phone.

Of course, my other big complaint with the Palm Pre -- its weak developer support still stands. Famed developer Jamie Zawinski just wrote about his absolutely ridiculous experience trying to get two simple apps available on Palm Pre phones. It's taken months, and they're still not available, even though he wants to make them available for free. Instead, as with the iPhone, the "approval" process of getting apps into the app store are positively ridiculous. I had been seriously considering getting a Palm Pre (in fact, a few months ago, I was positive I was going to get one), but without real developer support, it's just not worth it. I'll wait until a decent Android phone is available instead.

Filed Under: palm pre, pricing
Companies: palm

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  1. icon
    Derek Kerton (profile), 1 Oct 2009 @ 10:10pm

    Re: Palm Pre's Processor: 600 Mhz


    There are about half a dozen comments on this post about how Mike is an idiot because he doesn't understand business or he doesn't understand that a phone costs real money and therefore shouldn't be free.

    Are you all really that simple? Do you all really think Mike is that dumb?

    The argument he makes is that the Pre should be priced at 0 (dollars, Eu, etc) in order to be more attractive to the consumer market. Whether Palm likes it or not, the iPhone is the premium product, and Pre won't sell well with price parity. Sprint, also, is not the premium network, so it needs to compete on something else.

    That said, anybody at this site should already be aware that the street price of a phone is NOT the wholesale price the OEM offers to the carrier. The carrier still pays somewhere around $400-$500 for a Pre or iPhone (they keep it confidential). The carrier then recoups their subsidy on the street price with the high monthly bills, and a 24 month locked-in subscriber contract.

    So, no. Nobody thinks the Total Cost of Ownership is free, not you, not me, and...gee whiz...Mike knows about it, too.

    But consumers are attracted by low cash outlays, and consider TCO as a lower priority. The market has proven this over and over again. Thus, if Sprint isn't winning market share, they might consider lowering their price.

    Mike advocates $0, but I would suggest more on the order of $50. That's basically painless to the target market, but still much more attractive than the iPhone price.

    BTW, check out Walmart. Got the Pre for $79.

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