Palm Treo Pro: Is The Price Not Right?

Palm Treo Pro grand comeback BlackBerry

Coming in at $549, the Treo Pro may be the thinnest of all Palm devices, but it is also one of the priciest, especially compared with Palm's own Centro, which comes in at just under $100 from carriers like ATandT, Sprint and T-Mobile. The high ticket for the Treo Pro is because it is unlocked, meaning buyers don't get the benefit of a subsidy from wireless carriers, which usually results in a massive device discount with a signed contract. Users also get to choose which carrier they want to use, unless they want to use the Treo Pro's high-speed HSDPA capabilities; for that they must go with ATandT. But even the unlocked Palm Centro model taps out at around $300.

Currently, Palm ranks third among handset makers and has been strategically trying to get out from behind the looming shadow of Apple and its successful iPhone 3G and BlackBerry's line of devicesand#8212;not to mention the line of other device makers trying to become the next iPhone killer. Palm's Centro, which has sold more than 2 million units since its debut, and the fervor surrounding the Sprint-carried Treo 800w have helped in that pursuit and have brought Palm back in mindshare, but with the Treo Pro, Palm is looking to corner the high-end device user it once catered to exclusively, to the exclusion of cost-conscious mobile device users.

What has made the Centro so successful is not only its small price point, but the fact that it's geared toward first-time smartphone buyers looking for a fun, or some may call it cute, device to stay connected while at work or at play. But the iPhone 3G does that too.

And despite the complaints of its exclusivity with ATandT until 2010, iPhone's 3G also comes in with a smaller price tag than the Treo Pro. The iPhone 3G is offered for $199 for the 8-GB model and $299 for the 16-GB model if the user signs a two-year ATandT contract. Customers already with ATandT will have to shell out $399 for the 8-GB 3G iPhone and $499 for the model with twice the memory. That option also requires a new two-year service agreement. A no-contract iPhone 3G option, however, runs $599 and $699 for the 8-GB and 16-GB models, respectively, making the Treo Pro sound a bit more reasonable.

Meanwhile BlackBerry, for all of the multimedia and consumer-styled capabilities it's begun to pack into its smartphones, is still seen as the gold standard when it comes to corporate mobility. Even BlackBerry devices, including the Pearl and the Curve, come in several clicks on the price scale lower than the Treo Pro. And the forthcoming BlackBerry Bold 9000, which will make its U.S. debut this fall with ATandT and has already received rave reviews, is expected to carry a smaller price tag.

The Palm Treo Pro's high price has led some industry analysts to question whether it will be a sales hindrance going forward.

"Given the pricing and lack of carrier sponsorship in the U.S., we believe initial sales of the Treo Pro will be limited," CL King analyst Lawrence Harris told Reuters.

Palm, however, is standing behind the high price tag, pointing to the Treo Pro's 3G, Wi-Fi and GPS capabilities, all attributes that can be found on competing smartphones. Palm is also touting the Treo Pro's use of Microsoft's Windows Mobile 6.1 Professional operating system. Palm's senior vice president of marketing, Brodie Keast, said the Treo Pro and its Microsoft-based OS were put into play to make it a direct competitor with the BlackBerry Bold when it hits the U.S. later this year.

"We've chosen to partner with Microsoft to complete effectively with RIM," Keast told Reuters, adding that there is plenty of room for both companies to have a slice of the smartphone pie. "Even with the growth in this market, 90 percent of the market doesn't have a smartphone. It doesn't make sense to fight over the 10 percent. We want to reach out to people who don't have a smartphone, not people who already love BlackBerry."

Competition aside, it will come down to pricing and whether users are willing to pay an extra couple of hundred dollars to have the choice of carrier.