Is Palm Pre's June 6 Arrival D-Day For Sprint And Palm?

Sprint Nextel confirmed Tuesday that Palm Pre will arrive June 6. Sprint, as reported weeks earlier, will be the exclusive carrier. Palm Pre will be available at Sprint retail stores, and the Sprint Web site, and also at Best Buy, Radio Shack and Wal-Mart. The phone will cost $299 with a two-year service agreement, or $199 with a $100 mail-in rebate.

Palm Pre will face serious competition in the better-established giants of the smartphone market, not least Research In Motion's BlackBerry, Apple's iPhone and Google's G1. And it's worth noting that on the day Palm Pre becomes available, its thunder might last only a short time before being stolen completely. The reason? Apple's Worldwide Developer Conference is kicking off 48 hours later, and with that hotly anticipated event may come the next generation of Apple's iPhone.

But both Sprint and Palm have their game faces on. Speaking at an investor conference Tuesday, Sprint CEO Dan Hesse was quoted by Reuters as saying the initial run of Palm Pre phones available will be limited -- and predicted that initial demand would be high.

"We don't intend to advertise it heavily early on because we think we are going to have shortages for a while," Hesse said to Reuters. "We won't be able to keep up with the demand for the device in the early period of time."

Palm Pre was first unveiled back in January at CES, and as more details emerged in the months that followed, Sprint was announced as its exclusive carrier in the U.S. and Bell Mobility got the nod for Canada. Some observers questioned that exclusivity, with one researcher, ChangeWave Research, going so far as to cite 17 percent of consumers who wouldn't consider a Palm Pre at all because they didn't want to sign up with Sprint.

Palm itself has been hurting, chalking up its most recent earnings drop to "reduced demand for Palm's maturing legacy smartphone products, the challenging economic environment, and later-than-expected shipments of the Treo Pro in the United States." At the time, Palm President and CEO Ed Colligan essentially staked Palm's recovery on the Palm Pre and its new webOS.

"Despite the challenging market environment, the extraordinary response to the Palm Pre and the new Palm webOS reaffirms our confidence in our long-term prospects and our ability to re-establish Palm as the leading innovator in the growing smartphone market," Colligan said in early March.

Sprint, which has lost more than 6 million subscribers since mid-2007, is also much in need of a home run. Earlier this month, the company reported a net loss of $594 million for its first quarter, and revenue declined by 12 percent to $8.21 billion.

Sprint did express optimism at the time, saying it had seen growth in prepaid phone plans, something Sprint can continue to drive considering it's armed with a new phone to push.

A Macquarie Securities analyst, Philip Cusick, told Dow Jones Newswire Tuesday that the launch of the Palm Pre should help stem those losses, but estimated Sprint subscriber losses to still hit the 1.1 million mark in the second quarter.