Pixi or Pre? $99 Will Get You Either.

gallery-pix-00-250x185 The Pixi, Palm’s (PALM) second webOS-powered smart phone, finally has a price and a U.S. street date. This morning, Sprint (S) said the device will arrive at market Nov. 15. Price: $99.99 with a two-year contract and after a $50 instant rebate and a $100 mail-in rebate.

Not the most aggressive price considering that Amazon (AMZN) is currently offering the Pre, the Pixi’s elder, more robust sibling, for $99 (see image below; click to enlarge) with a two-year contract as well. Remember, the Pixi has a slower processor and a smaller screen than the Pre. And it doesn’t support Wi-Fi. Has some neat back covers though!

Worse, Pixi requires $200 to get out the door, and statistically speaking, there will be quite a few people who will fail to cash in that second $100 rebate. As I noted back when the Pre launched with a similar rebate program, redemption rates for offers like these typically run around 58 percent, thanks to customers who either find the process too cumbersome or forget about it entirely.

This can end up being quite lucrative for the issuing company. Consider this: In 2004, TiVo (TIVO) promised customers a $100 mail-in rebate within six to eight weeks of the purchase of a new DVR. About 50,000 of the 104,000 eligible for that offer failed to take advantage of it. That saved TiVo about $5 million.

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Palm Pre: $199 After a $100 Rebate We Hope You Lose

Sam Harrison

you can’t give these away…are you serious?
Fred Hamranhansenhansen

I don’t get the Pixi at all. It seems to highlight the worst of the Pre (awful hardware keyboard, slow operation, immature software, no native apps, proprietary networking) rather than the best of Pre (full-face touch screen, desktop Web browser, Wi-Fi).
Andrew Augustine

Actually, the Pixi makes a lot of sense. Its keyboard is considered top tier with excellent feel – according to reviewers that have handled the device. It is surprising that people (internet bloggers) would offer opinion and characterize a products keyboard without handling the product – makes you wonder how they arrive at their other opinions.

I think this article on the Pixi is quite fair and insightful (especially the information about how people respond to rebates). But back to the topic; the Pixi, in my opinion is being positioned relative to the Palm Pre at a lower list price. I am sure that Best Buy, Radio Shark, and Amazon will have nothing to do with that rebate Sprint is offering their customers; they most likely will price the Pixi at a flat $99 plus tax. And because of the lower list price, we should expect to see the Pixi discounted to $50 sometime in the future. But at $99, it is still a great buy!

I think the form factor of the Pixi is quite beautiful. It is incredibly small and yet the screen “in actual use” is surprisingly large (based upon the specs and reviews on the device). And though the colorful screen resolution of the Palm Pre is amazing, I hear that the Pixi is every bit as impressive. We make a big deal about Wi-Fi, though I think that Wi-Fi at times is quite useful. But Sprint’s data network is awesome and purchasers of the Pixi should have an amazing Internet and Web browsing experience.

If you consider that the Pixi is a sophisticated smart phone running Palm’s revolutionary WebOS operating system, and yet it is targeted at the general public, young people buying their first smart phone, or women wanting an elegant phone with a small form factor to carry in their purses, the Pixi should be very successful for Palm and Sprint in the yearend holiday shopping season.

Pixi or Pre? $99 Will Get You Either.

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