Can Palm Pre compete with the iPhone?

The Palm Pre phone

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Kai Ryssdal: The latest entry in the smartphone wars goes on sale this weekend under the catchy name of the Palm Pre. Pre what though is a fair question, since Palm is actually playing catch up. This phone is a must-win for Palm. The company has gone from digital darling to afterthought in just a copule of short years. Early reviews say the Pre is pretty good. But how's it going to play against the iPhone? Marketplace's Stacey Vanek-Smith gives us the 411.


PALM PRE AD: Isn't it beautiful when life simply flows together? Introducing the Palm Pre.

STACEY VANEK-SMITH: A few hundred dollars and a two-year contract with Sprint will need to flow together if you want to get your hands on the new Palm Pre. It has high-speed internet, GPS, a digital camera with flash and, a first for smartphones, a touch-screen and a keyboard. CNET editor Bonnie Cha has tried out the Pre.

BONNIE CHA: The multi-tasking capabilities, I think they've set a new standard for that. And the display is just really vibrant and amazing, and I think it's better than the iPhone's.

Display's important, but these days it's all about the apps. You know, those software applications that let you pop virtual bubble wrap or find a bathroom in New York. The iPhone has more than 35,000 apps. The Pre, about a dozen for now. Industry analyst Jeff Kagan says Palm has to deliver on that front. He points out Palm invented the PDA -- remember the Palm Pilot? Yeah.

JEFF KAGAN: Palm, which basically cornered the smartphone market in the beginning, is now just trying to get some attention. And now this new device is supposed to breathe new life into its lungs.

Palm may have an edge. It costs the same as an iPhone, but Palm's contract with Sprint is roughly 20 bucks a month cheaper than iPhone's AT&T contract. Mark Donovan is an analyst for ComScore.

MARK DONOVAN: One decision I think is going to be price point for people. I think price is certainly in this economy an important factor.

That hasn't been lost on Apple. It's expected to announce a new iPhone on Monday, and it could come with a lower price.

I'm Stacey Vanek-Smith for Marketplace.

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