Pricing the Pre Out of the Market

6. Being unique matters

There's nothing unique about the Palm Pre. It's a device that features a touch screen, a few apps, some corporate functionality and little else. I'm sure Palm would argue that the device's multitasking features are unique. To some extent, I would agree. But at the same time, that's a very inconsequential feature that probably matters to few people. Every device needs a "hook." The Palm Pre doesn't have one.

7. The price is in no-man's land

Right now, the Palm Pre is being offered for $149.99. The price was reduced by $50 after Palm had offered the product for $200 with a two-year agreement since its launch. At $149.99, Palm is pricing the Pre out of the market. When given the chance to choose between a Palm Pre on Sprint or an iPhone 3G for $99 at AT&T with all the apps, what would make the user pick the Pre? That question isn't so easily answered. And I think that's most reflected in both devices' sales figures.

8. The marketing effort is slipping

I've seen several Palm Pre ads of late, but for the most part, they don't quite capture me as Apple's iPhone ads do. They don't prove to me that the Pre is a device I really want. Worst of all, they don't show me that the device is so good, it can compete against the iPhone.

9. Design matters

The Palm Pre isn't a bad product. In fact, some users are quite happy with it. But the main problem with the Palm Pre is that when users try it out at a Sprint store, they're not captivated. They're not seeing anything special. But when they use the iPhone, it's a different experience. The feature set is robust. The touch screen is stellar. And all the options it provides through outstanding software design make it an ideal phone for anyone looking to do more than simply place calls.

10. It's not Apple

It's difficult to discount a product simply because it's not made by Apple, but in the mobile phone market, if a device doesn't have an Apple logo affixed to it, the device simply won't receive the kind of attention the iPhone does. Apple is a major player in the tech industry. It's widely considered the benchmark for all other companies. And if a respective company's device can't live up to Apple's products, it's immediately filed away as an also-ran.

So far, the Palm Pre can't live up to the iPhone. And without support from Verizon Wireless, we might look back at this year and see the Pre as a flop, rather than a success.