Palm Pre beats the iPhone on price, but will it on sales?

It’s official – Sprint (NYSE: S) will make the Palm (NASDAQ: PALM) Pre available beginning on June 6th, it announced today via press release, putting an end to the rampant release-date speculation. The phone will retail for $200 with a two-year service plan after a $100 rebate, the same price point as the 8 GB iPhone 3G and $100 cheaper than the 16 GB version.

The exclusive Sprint device will be available in its retail stores, online and at Best Buy, Radio Shack and select Wal-Marts on the first Saturday in June. This is just two days before Apple kicks off its Worldwide Developers Conference in San Francisco, which many believe will be the stage on which Apple makes its next iPhone announcement. Apple, as usual, has kept quiet on what it has in store, but most are angling towards a new version of its iconic device.

Much like the iPhone, Pre owners are required to subscribe to an all-you-can-eat data plan, Sprint’s Simply Everything or a Business Essentials with messaging and data plan, which range from $70 to $90 per month. The iPhone requires an extra fee for text messaging and runs about $70 per month. According to a Business Week report yesterday, however, AT&T is considering cutting the price of its monthly plan or offering a range of lower-priced plans. The report was unconfirmed by the carrier, but suggested a $10 decrease in the overall monthly bill. The same report also suggested that AT&T could reduce the up-front price of the iPhone by as much as $100 or even offer a prepaid version of the handset.

Since the Pre was announced at CES this year, it has received a lot of hype due to its new Web-based operating system charged with reviving the struggling brand. While the Saturday release and the retail distribution strategy should help Palm, it remains to be seen if consumers will wait to hear what Apple has in store before making their purchase. With all the pricing rumors floating around for the iPhone and the relative price and cool factor of the Palm Pre, money could play a big role in the decision for a lot of consumers, as well as the success that Palm can expect with its handset.

“If Apple does introduce a cheaper iPhone on June 8th, Sprint Nextel/Palm might have no other choice but to reduce the price of the Pre, which would mean less margin and revenue for Palm, but would help the company better compete with Apple and other competitors,” Julien Blin, principal analyst & CEO of JBBresearch wrote in a research note. “Hopefully, Palm and Sprint are ready for the battle. Apple could once again become a disruptor.”

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