Foiled Again! Palm Pixi Overshadowed By Apple, Stock Dives

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Another Palm smartphone announcement, another spotlight stolen by a much-more-ballyhooed (if much less substantive) Apple event. Palm, you just can't win, can you, even with a hot new smartphone called Pixi?

In case you missed it -- and given the hype around Steve Jobs' return to the Apple stage and myriad iPod price cuts and technology updates, you may have -- Palm Wednesday unveiled a new smartphone, the Pixi, that comes with a range of enticing features and is designed as a complement to Palm's already released Pre.

According to Palm, the Pixi sports a full keyboard, a 2.63-inch multitouch screen, an integrated GPS and 2-megapixel camera. Like the Palm Pre, the Pixi incorporates Facebook, Google and Exchange ActiveSync, but also includes LinkedIn and Yahoo contacts, calendar and IM capabilities, plus Palm Synergy, which aggregates those social networking tools into one feed.

As Palm Chairman and CEO Jon Rubinstein emphasized Wednesday, Palm Pixi moves the needle on Palm's webOS (whose version 1.2 was said to have leaked late last week).

"Palm Pixi brings this unique experience to a broader range of people who want enhanced messaging and social networking in a design that lets them express their personal style," Rubinstein said in a statement.

The only thing Palm didn't disclose about Pixi was pricing, although various reports previously suggested it would come in at $350 before rebates. Palm also Wednesday lowered the price of the Palm Pre to $150.

Neither announcement, however, did much for Palm's stock, whose shares skidded by $1.23 (an 8 percent decline) to $13.75 in Wednesday afternoon trading after a lukewarm reaction from analysts.

Among the more vocal critics was Credit Suisse's Deepak Sitaraman, who lowered his rating of Palm to "neutral" from "outperform," blaming Palm's choice to make Sprint the exclusive carrier for Pixi.

Others thought Palm was hurting its own interests by coming out with two new smartphones that are so much alike. Morgan Joseph's James Moore said in a research note that Pixi "is a nice device but threatens to cannibalize Pre sales given a large number of overlapping features and the expected lower price point."

Palm needs a winner if it expects to stay in the always-intensifying race for smartphone dominance -- a race in which Apple, with iPhone, and Research In Motion, with BlackBerry, are well ahead.

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