This Year's Pre? Or Last Year's iPhone?
Palm (PALM) picked a hell of a day to launch the Pre. Two days before Apple’s World Wide Developers Conference. Two days before the unveiling of the iPhone 3G S, a new version of Apple’s (AAPL) iconic handset that runs twice as fast as its predecessor, shoots video with an improved three megapixel camera and boasts longer battery life and greater storage.
And worst of all, two days prior to the announcement of a new $99 price point for the iPhone 3G, a disruptive move that puts the device in reach of far more consumers and allows Apple to position last year’s iPhone as a competitor to this year’s Pre (and BlackBerry Storm too). And unlike this year’s Pre, last year’s iPhone comes with iTunes, a robust developer ecosystem, access to 50,000+ apps and soon iPhone OS 3.0.
Certainly, a $99 iPhone 3G is a very compelling proposition. Said CL King & Associates analyst Lawrence Harris, “Apple’s strategy appears to be designed to take advantage of the current limited availability of the Palm Pre. It is clear that Apple intends to maintain its leadership position in the smartphone market, given its decision to cut prices.”
Clear too that Palm’s decision to roll out the Pre this past Saturday was folly and has not only left the company’s most important product release in years washed away in a deluge of Apple coverage, but allowed a powerful rival with a lot of market buzz to undercut the price of its bet-the-company handset within just days of its launch.
Sadly for Palm, it may be that the Pre’s best days are already behind it.