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Can Verizon Save Palm?

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Palm (Nasdaq: PALM  ) fans and investors can breathe a sigh of relief. The fate of the Palm Pre, by which I mean the survival of Palm itself, does not depend entirely on Sprint Nextel (NYSE: S  ) . Today, Verizon (NYSE: VZ  ) Wireless confirmed that the Pre is coming to the largest network in America -- in six months.

OK, so it's not an instant lifesaver. The Pre will live and die with an exclusive Sprint contract for a few months. Not to put too fine a point on it, but Palm is probably kicking its anthropomorphic self right now for signing that exclusivity clause into a contract with the third-largest network -- when the biggest boy on the block clearly wants what Palm has to offer.

There's also the matter of pushing the Pre's original release date all the way back to June after a paper launch in early January. Now, the supposed Apple (Nasdaq: AAPL  ) iPhone killer -- which reportedly will sync up with iTunes out-of-the-box just like the Apple original does -- hits store shelves just two days before Apple unveils the third-generation iPhone. Sure, that's another paper launch with hardware to follow in a matter of months, but one that's likely to take the edge off any launch momentum the Pre might get.

Still, I'm expecting the initial batch of Pre phones to fly off Sprint shelves and into the hands of Palm fans camping outside the store doors. That might be enough to keep the train a-rolling until a larger network with about twice the number of Sprint's customers comes along on a white horse. And AT&T (NYSE: T  ) might also be interested by then, if things are going Palm's way.

But the real question is this: will the Pre really be so impressive that it can impress smartphone buyers six months from now? With easy access to the iPhone 3.0, a gaggle of upcoming Google (Nasdaq: GOOG  ) Android models, and a next-generation Blackberry Storm from Research In Motion (Nasdaq: RIMM  ) , I'm not so sure that the Pre will stand the test of time. It could be just another phone, you know.

The proof is in the pudding, of course. Let's see what you've got, Palm!

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Google is a Motley Fool Rule Breakers recommendation. Apple is a Motley Fool Stock Advisor selection. Sprint Nextel is a Motley Fool Inside Value selection. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.

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  • Report this Comment On May 28, 2009, at 4:10 PM, Aryabod wrote:

    The proof is already in the pudding, you would have to be very naive to assume the Pre is going to be a failure or ignorant to the capabilities of the Pre. Remember it is also 4G compatible and Apple unfortunately will be handicapped until 2012 before it can produce a 4G version unless it unties the exclusive knot with ATT. Initially Palm won't need anyone other than Sprint but when production is fine tuned where supply logistics can manage demand, then the time will be ripe for Palm to spread its wings. It appears they have already negotiated with major wireless carriers around the globe after Sprint's six months is complete, which would be safe to say January of 2010.

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