- While the Sprint-only ($S) Pre has had a very tough time competing with the iPhone and other high-end smartphones, the newer and lower-end Pixi is being heavily promoted & discounted at Amazon ($AMZN), Wal-Mart ($WMT) and other outlets.
- Pixi, unlike the Pre, is multi-carrier and will soon be available for both Verizon ($VZ) & AT&T ($T)
- Much of the growth in the mobile market (at least in developed markets like the US) is coming from the transition from traditional phones to smartphones. While the high-end of the market (i.e. mobile professionals) has mostly transitioned, many low-end consumers have not. The carriers have a strong incentive to get smartphones in consumer hands – even the low-end, price sensitive ones.
- The lower-end of the consumer smartphone market is still wide open. Apple ($AAPL) of course is always a threat but has never been particularly interested in the low-end of the market – plus their single-carrier relationship with AT&T limits them – for now at least.
- Palm has had, in the past, at least moderate success with a low-end, multi-carrier volume approach with their predecessor to the Pixi – the Centro.
- Gaining a significant volume of customers via the Pixi should encourage mobile application developers to devote more resources to their technically highly-regarded if not highly market-accepted WebOS.
- A significantly larger installed base could also make Palm much more attractive to a buyout from Nokia ($NOK) – or other.
Is a low-end volume strategy a long shot? Yes – but given Palm’s challenging financial and market position – standing pat is not an option either.
Thursday’s earnings call should be interesting.