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 Palm's long-suffering profit margins could finally get a bump: The smartphone maker just released its new Treo 800w, which will be sold via Sprint Nextel (S). This is one of the Microsoft (MSFT) Windows Mobile-based phones that Palm has been teasing for months. It's hoping the Windows machines will boost revenue and margins while the company preps top-secret, next-gen phones for next year.
The problem: We see Sprint and Palm having a hard time collecting $249 (after $100 mail-in rebate) for the new Treo next to a sea of cheaper competitors. We think many Sprint smartphone buyers will opt for the $130 Samsung Instinct, the $99 margin-killing Palm Centro, or the $150 RIM (RIMM) BlackBerry Curve. And let's not forget Apple's (AAPL) iPhone, which is more advanced than the Treo (multi-touch display, better Web browser, same Microsoft Exchange corporate email capabilities) and cheaper ($199 at AT&T).
The remaining audience: Sprint Windows Mobile enthusiasts who don't like Sprint's HTC Mogul. Translation: We think Palm (PALM) and Sprint will be lowering the price on this one sooner than later.
See Also:
Palm Stinks Up Q4; No Big Deal
Palm CFO: Not Telling You Anything About Our Awesome New Operating System
Photo Of New Treo Emerges, Proves That Palm Is Still A Year Behind The Industry
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