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May 12, 2010

AT&T Mobility will begin offering the Palm Pre Plus beginning Sunday for just $150 after the usual rebates.

Additionally, for a limited time, the wireless carrier will provide Palm’s Touchstone Charging Dock for free to customers picking up the new smartphone in AT&T retail stores.

The new launch is somewhat of a win-win for Palm, which recently announced that it was being acquired by Hewlett-Packard for $1.2 billion after the company put itself up for sale following disappointing sales of its Pre and Pixi product lines.

Many wireless industry observers have heaped acclaim on the devices’ WebOS operating system, but consumers have been slow to discover the devices due to an increasingly competitive smartphone market dominated by Research In Motion’s Blackberry lineup, the growing number of Google Android-powered devices and Apple’s iPhone.

Sprint Nextel, which had exclusivity for the device through the end of 2009, is currently selling the Pixi non-Plus version for free while the non-Plus Pre still remains at $150.

Verizon Wireless, which began offering the device in January, recently slashed the price on its offering and began throwing in the device’s embedded mobile hotspot feature for free.

Verizon is currently offering the Pixi Plus for free and the Pre Plus for $50 through its Web site.

The pricing problem could mean some trouble for Palm at AT&T Mobility as the wireless carrier currently has a number of smartphones below $100.

More disturbing for the Pre’s future at the carrier is that it is selling iPhones for as little as $49 for refurbished 3G models.

In April, French mobile service operator SFR began offering the first GSM-version of the Pre and Pixi models through the wireless carrier’s website with plans to expand to retail locations beginning today.

On April 22nd, AT&T Mobility posted 1st quarter financial results showing an increased dependency on non-traditional wireless devices as well as a considerable slowing down of lucrative postpaid net customer additions.

However, for its first fiscal quarter, AT&T Mobility said it added 1.9 million net activations to its network, which was well ahead of the 1.5 million expected by analysts, ending the quarter with nearly 87 million new customers.

AT&T said it added 512,000 direct postpaid mobile customers during Q1, which was inline with estimates, but a substantial drop from the 875,000 direct postpaid customer additions the wireless carrier reported during the first quarter of last year and the more than 900,000 it added during the final three months of 2009.

Helping to increase its customer growth for the quarter was a drop in customer churn rates from 1.5 percent during the first quarter of last year to about 1.3 percent this year.

Postpaid churn rates also dropped from 1.15 percent last year to a little over 1 percent this year.

Overall, the growth was boosted by strong adoption of connected devices, including e-readers, GPS devices and alarm monitoring systems, which the wireless carrier said accounted for 1.1 million net adds during the quarter and totaled 5.8 million devices.

AT&T Mobility reported total revenues, including device sales, increased more than 8 percent year-over-year to $13.9 billion, while income was up almost 21 percent to $4.17 billion.

AT&T's wireless division accounted for close to 46 percent of the company's total revenues for the quarter.

AT&T Mobility did note however that about 46 percent of its 65 million postpaid customers had a wireless device that included a real or virtual QWERTY keyboard, an increase from 32 percent at the end of the first quarter of last year.

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Source: AT&T Mobility.