Palm Pre's Rumored $200 Price Won't Cut It Against the iPhone

BY Kit EatonMon May 4, 2009 at 7:26 AM

Uh-oh. There's a another rumor about Palm's upcoming "iPhone killer" cellphone, and it's not nice. According to "sources" the Pre's price will be $200 with contract for new customers, placing it at the same price point as the 8GB iPhone. And if you want an off-contract one, it'll be $1,000.

However you want to measure it, that's a huge number for a contract-free smartphone, compared to the $700 or so of the Nokia N97's full price, or the $650-ish Europeans pay for non-contract iPhones. But it's the rumored $200 price for new contracts on the Pre that's the really nasty bit. It's surprisingly large, though it's not as big as the $300 upgrade price for existing Sprint customers.

In comparison, an 8GB iPhone, with all of Apple's cachet also costs you $200 with a two-year AT&T contract. Okay that $200 is for an 8GB iPhone, with no option to expand its storage, unlike the Pre, and the 16GB phone is $100 more. But it's for a highly desired device, with a jam-packed App Store, and you can buy a refurbished 8GB one for a mere $99 and a refurbished 16GB one for just $149. And that's the old iPhone 3G, due for a replacement/upgrade/reinvention in only a month or so--and, if Apple's past actions are anything to go by, the new one will cost around the same.

If Palm is going to take on the iPhone, and that rumored on-contract pricing is really what the Pre will sell for, then Palm might be in trouble. Especially given the rumored low build-cost: Those off-contract prices suggest Palm thinks its phone is worth more per unit than the iPhone, Blackberry storm, and N97...can that actually be true?

[via Boy Genius Report]