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Palm, the maker of the Treo e-mail phone, introduced a new version of the device for the first time in 18 months, stepping up competition with Apple’s iPhone and Research In Motion’s BlackBerry.
The Treo 800w sells for $249.99 through Sprint Nextel, the third-biggest US wireless provider, Palm said yesterday in a statement. New features include an updated operating system from Microsoft, making the model more suitable for business use, the company said.
The debut came less than a week after Apple introduced its iPhone 3G, which sold one million units in the first three days. Palm has posted four straight quarterly losses after the seven- year-old Treo lost customers to the iPhone and the BlackBerry, forcing the company to cut prices.
“Palm is counting on the Treo 800w to reverse its recent decline” in prices, Lawrence Harris, an analyst at CL King & Associates in New York, said in a note to clients. Still, he said the device probably won’t generate “significant” sales because the iPhone is slimmer and easier to use.
Palm, based in Sunnyvale, California, fell 11 cents, or two per cent, to $5.42 in Nasdaq Stock Market trading at 4pm New York time. The shares have lost 15 per cent this year.
Last month, Palm reported a wider fourth-quarter loss than analysts had estimated as Treo sales fell and demand for the $99 Centro phone failed to make up the difference. The average price of Palm’s phones fell 39 per cent in the quarter from a year earlier, hurting profitability, according to Harris.
With the pricier Treo 800w, Palm expects to “better balance” its profit margins, Brodie Keast, the company’s senior vice president of marketing, said yesterday in an interview. The phone is aimed at employees of larger companies and competes more directly with the BlackBerry than the iPhone, which is targeted at consumers, Keast said. He declined to say how many units Palm expects to sell. The company sold 913,000 phones last quarter.
Sprint will start a television and internet ad campaign for the phone this month and has a “significant” marketing budget for the device, Corinne Fitch, a product manager at Sprint, said in an interview.
She declined to say how much the Overland Park, Kansas-based company plans to spend.
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