Palm EOS Looks To Undercut Smartphone Market At $99

As many are awaiting the highly hyped Palm Pre, information leaked out about a new ‘mini-pre’ code-named ‘Pixie’.  The Pixie is said to be a smaller and substantially cheaper version of the Pre that will debut shortly after its big brother this summer.

The Washington Post is reporting the Pixie will be a candy bar-style phone and use the same WebOS as the Palm Pre.  Palm is hoping to undercut the entire smartphone market by offering this new handset for $99.

Engadget managed to obtain this leaked photo of the new Palm EOS. (codename: Pixie)  One thing that smells fishy about this story is the speed at which it is progressing/leaking.  I would say it is a organized leak campaign by Palm to stir up some press as we approach on the new iPhone launch coming in June.  Engadget also managed to obtain leaked specs about the Palm EOS:

• Dimensions: 10.6×55x111mm
• Weight: 100 grams
• 2.63?, 320×400 capacitive touch screen
• 4GB of internal memory
• Tentative price of $349 before rebates. Our sources are indicating that the target price point is $99 after all is said and done.
• 2MP camera, fixed focus, with flash
• Bluetooth 2.1 w/ A2DP and EDR, USB 2.0 via micro USB
• 1150mAh battery, removable
• SMS, MMS, built-in IM client
• A-GPS
• WAV, MP3, AAC, AAC+ ringtones, MPEG4, H.264, H.263 video playback.

Not all things are shiny and beautiful at Palm though in recent weeks.  Ashok Kumar, an analyst with Collins Stewart has made public that Palm is experiencing multiple hardware and software issues with the Pre leading to drastically reduced production orders from Palm.  Some analysts believe Palm will stockpile the handsets in their inventory to heighten the sense of demand in the marketplace.  Stockpiling for this reason really gets under my skin.  Sony doing this with their PlayStation consoles has nearly pushed me to Microsoft and their Xbox system, but that’s for another blog!

Reports swirling the Internet indicate that the Palm Pre costs $170 to produce.  This poses some major problems for Palm.  Bottom line is the Palm Pre must come in at $200 or less once launched.  Sprint is the only carrier to jump on board the Pre train and their network problems will not lure any AT&T customers over to their customer base.  However, the Palm EOS may feed the need for AT&T customers as the EOS looks like it will end up with AT&T.

If the Pre ends up being more than $200, it never had a chance from inception.

Does what the Palm Pre have to offer be enough for you to switch to Sprint?  What would it take for your to switch carriers?