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5/19/09

Sprint to sell Palm Pre for $200 after rebate

By Sinead Carew Reuters

NEW YORK (Reuters) - Sprint Nextel Corp will sell Palm Inc's long-awaited Pre smartphone starting on June 6 for $199.99 with a two-year service agreement and after a $100 mail-in rebate, the phone company said on Tuesday.

Pre is expected to help Sprint stem customer losses and is seen as Palm's best hope to regain smartphone market share from Apple Inc's iPhone and Research In Motion's BlackBerry.

Sprint is Pre's exclusive carrier at least through the end of the year.

Sprint's pricing matches the current version of iPhone sold by bigger rival AT&T Inc but some analysts expect Apple to announce a cheaper version of iPhone as early as June 8.

CL King Associates analyst Lawrence Harris said that some investors may be disappointed that the phone was not priced below iPhone and that it will not be available sooner.

"It would've been nicer if the device was out in the market for a longer period before any potential iPhone," Harris said.

While the device may stop existing customers of Sprint and Palm from switching to rival phones and service, it would be unlikely to lure away users of iPhone or BlackBerry, he said.

"Its going to sell principally into the base, to existing Palm owners and existing Sprint subscribers," Harris said, without giving a specific sales target.

The Pre has touch screen controls as well as a keyboard that slides out from under the phone. It will run on Sprint's 3G network and feature personal and professional calendars, e-mail, and contact lists, the company said.

Sprint shares were up 1.5 percent at $5.40 in early trade after a $5.32 close on NYSE. Palm shares were up 6 cents in pre-market trade at $12.12.

Palm shares have risen from a low of $3.30 before it announced Pre at the January Consumer Electronics Show, where it was the most talked about device at the show.

(Reporting by Ritsuko Ando and Sinead Carew; Editing by Derek Caney)


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