Verizon Wireless is aggressively pushing Palm’s webOS smartphones, with sharply reduced prices and other special offers. The largest U.S. carrier announced Thursday that the price for the Palm Pre Plus has been reduced from $149.99 to $49.99, and the Pixi Plus from $99.99 to $29.99. Both deals include a two-year service contract.
But, wait — that’s not all. Buy one smartphone and you get a second for free, and service for the Mobile Hotspot application is thrown in as well. The app allows the Palm to use its 3G connection as a mobile Wi-Fi hot spot for up to five other devices simultaneously.
‘Inventory Overhang’
The application has been free, but Verizon had charged $40 monthly for up to five gigabytes of data. Now the service is free for new Palm customers, as well as for existing ones.
Avi Greengart, an analyst with industry research firm Current Analysis, pointed out that Palm shipped “a tremendous amount of inventory” in the most recent quarter, about 960,000 units, but only 408,000 sold. This, he said, is why Verizon is moving aggressively to lessen this “inventory overhang.”
The low prices, he said, as well as the BOGO — buy one, get one free — offer will help Palm by spurring sales and attracting publicity. But, Greengart noted, this will not necessarily drive Palm’s perceived value downward.
“BlackBerrys have been sold significantly under $100,” he pointed out, “and you can get an iPhone for $99,” yet neither Research In Motion nor Apple has seen the value of those products diminished.
‘Premium, Value-Priced Product’
In fact, said Michael Gartenberg, a partner at the Altimeter Group, these new offers are “a way for Palm to distinguish itself as a premium, value-priced product.” The new prices, he said, and the free service for the Mobile Hotspot are good differentiators, and “not a…