It may seem counter-intuitive, but today’s announcement that the Palm Pre will become available on Verizon after its six-month exclusive with Sprint is pretty bad news for Palm.
Sprint has had six-month exclusives with Palm smartphones since the first Treo, so a post-exclusive deal is surprising only if you haven’t been paying attention. But usually, Palm’s next move is to ship an unlocked GSM phone for the world market, with Verizon coming a few months after that. But now, AT&T has its own very nice smartphone — the iPhone — not to mention a bunch of Blackberries that people like. And T-Mobile is doing very well with the Android G1 and Sidekick lines, thanks very much, with more Android phones imminent. So the two U.S. GSM players don’t care so much about the Palm Pre. Verizon, on the other hand, could use some sex in its handset lineup.
But what’s big trouble here for Palm is that the Pre now doesn’t have a GSM outlet in the U.S. There’s no question that there will be a Pre for the world; GSM is far and away the most popular mobile technology globally. But don’t count on a U.S. cellco distributor for it anytime soon, which means it will be wicked expensive because there won’t be any subsidized sales. For the U.S. market, the Verizon deal shows Palm’s weakness, not its strengths.
May 28, 2009