Palm's Treo Goes Pro

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Not many of you agree with me that Palm (Nasdaq: PALM  ) will burn your portfolio. You may be right: Palm this week bore further fruit from its revamped engineering team with the announcement of the Treo Pro.

The Pro is roughly what you'd expect -- a Treo with a thinner frame, a wider screen, and enhanced capabilities, including Wi-Fi and a built-in Global Positioning System. (Does anyone else think that Garmin (Nasdaq: GRMN  ) may as well be two years late with a GPS-enabled smartphone? But I digress.)

It's a nice follow-up to the Centro, a $99 lightweight smartie that has proven to be an unqualified hit. On features, I think the Pro would have a chance to succeed as the Centro has. Certainly the design and feature set suggest to me that hiring Jon Rubinstein, who helped Apple (Nasdaq: AAPL  ) make the iPod a hit, was a very smart move. And yet I'm bearish on the Pro's prospects; I don't see it improving Palm's position versus Nokia (NYSE: NOK  ) , Research In Motion (Nasdaq: RIMM  ) , and Apple.

It's too bad because Palm's timing is perfect. The 3G iPhone has suffered dropped calls, and reports that, while a software patch is helping, German chipmaker Infineon (NYSE: IFX  ) may also be to blame. If so, it could be months before the problem is eliminated entirely.

So, if neither features nor timing is an issue with the Treo Pro, what is? Pricing. Palm is suggesting that retailers sell the device for $549, otherwise known as iPhone territory. Is the Pro really better than the iPhone or the BlackBerry? I say "better" because the Pro is the rebel here. The original iPhone proved that users would dump an incumbent for a rebel when the rebel is the better alternative. History hasn't been as kind to would-be rebels that weren't different enough, or at least differently priced.

The Treo Pro is neither, which means that -- in spite of its name -- it's still very much an amateur.

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Fool contributor Tim Beyers owned shares of Nokia at the time of publication. When he's not typing up articles for, you'll find him picking growth stocks for Rule Breakers. Get access to all of his writing here.

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