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  1. mgauss's Avatar
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       #1  
    Today's economy is tough. Also really the money is not in the device but in getting new LOYAL customers for the phone companies. Plus the individual parts of the 600 add up to $ 299 in retail dollars.

    Also, what is happening is the pricing is like coming as if Handspring was getting its "R&D" money back. Palm does not need to "make that back." What Palm needs is to establish itself in the next generatino phone before Microsoft eats up that market.

    Ignoring R&D, to spit out one more treo w 600 would cost $80. So they can sell it for $ 299 easy.

    Go ahead, be pigs in this economy. You are just opening it for Samsung to come in and clean up.
  2. #2  
    The margins on any PDA, phone, or combination of the two are not 70-75% as you suggest here. If the margins were that high, everyone would be in the game driving prices to about $100-$125 maximum for any PDA, phone, or combo.

    I'd like to see how you come to your figure of $80. And yes, please include R+D because that has to be taken into account. Blazer just doesn't rewrite new versions of itself, for instance.
  3. #3  
    Originally posted by mgauss
    Today's economy is tough. Also really the money is not in the device but in getting new LOYAL customers for the phone companies. Plus the individual parts of the 600 add up to $ 299 in retail dollars.

    Also, what is happening is the pricing is like coming as if Handspring was getting its "R&D" money back. Palm does not need to "make that back." What Palm needs is to establish itself in the next generatino phone before Microsoft eats up that market.

    Ignoring R&D, to spit out one more treo w 600 would cost $80. So they can sell it for $ 299 easy.

    Go ahead, be pigs in this economy. You are just opening it for Samsung to come in and clean up.
    If I were a stock holder of Handspring or Palm and they chose to give them away for that price, I'd bring a class action lawsuit against management. Palm does need to make the R&D back. It's part of their balance sheet. The pda phone is also NOT competing against the cheap $50 Nokia phone.
  4. #4  
    I'm not sure how, when you "add up the parts", you get $299? Here's the parts as I see them - the Treo is essentially equivalent to:

    Zire 71 (except for screen res), cost $299
    Color, camera cell phone - cost typically $50-$250

    Add in the benefits of truly usable wireless email and web browsing (unlike most phones today), a full qwerty keyboard, and all of the "zen of palm" usability integration that I'm sure will be in it, and it seems to me like a Treo 600 is actually BETTER than the two above devices put together, so paying a premium price of $499 doesn't seem unreasonable. I'd prefer $399, but I'm sure the Treo 600 will get there over time.

    Am I missing something here? Or are the people who are asking for $299 the greedy ones?
  5. purpleX
    purpleX's Avatar
    #5  
    Treo 600 will never cost less to make than standard high end phone.

    -It has FAR bigger battery
    -custom made screen, instead of industry standard.
    -HS need to customize the keyboard for each foreign market area
    -it has higher chip count than competitor.
  6. #6  
    Sorry to restate the obvious, but since there are plenty of people willing to pay almost anything to get the Treo 600 first, why should they charge less than $499? We know that the price will go down later, but it is the same with most new hot phones upon introduction.
  7. mgauss's Avatar
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       #7  
    No, no y no!

    I went with my jetsetter sister last night to the AT&T store.

    She pushed it to $ 150. I said, hey what about those phones where you can get your email for $ 399...it was like I was talking about going to the moon for a meal.

    Look it. I pay Sprint $ 150 for me and my wife every month. That is $1800 a year!

    The ONLY REASON I happen to S T A Y with Sprint is the Treo. I look at those unlimited plans talk all you want for $ 35 a month too.

    Speaking strategically, then, Sprint really has $ 1800 in potential revenues for next year dependent on my preferences, and I am thinking here NOT of Sprint, but of a phone.

    If the carriers ignore that, and of the phone companies ignore that, and they do not create a friendly environment, it opens a lot of doors.

    And that is a shame really for the carriers, who have still years of fat profits coming in as we are all ready, even the most humble maid, to pay $ 29.95 a month for wireless service.

    In the future, the cell will be $ 10 a month. And the phone will of course get email and browse.

    The question is will Palm (and the Handspring legacy) still be there as a hardware company, or will it go back to the Nokia/Motorola/Microsoft/Sony ex and soon to re be monopolies.

    And I submit to you that unless Palm (Now) makes a real deal with the carriers, the whole email phone will suffer a strategic 2 or 5 year's delay until just be rote technological nature we end up with the Motorola Treo equivalent in 2006 for $ 99 with $ 10 a month...but Palm willl be dead then.

    Why do I care? Aside from being a techno nerd I really don't know. I guess I wanted the Handspring genius to travel all the way to the masses...who will never know the true original leaders...kind of who knows the name of that girl at Xerox that invented the mouse that Jobs went to visit and stole the idea and then Gates took over the idea and created the...that girl is lost, but it was she who made the mouse (and thus Windows) possible!
  8. #8  
    Originally posted by mgauss

    I went with my jetsetter sister last night to the AT&T store.

    She pushed it to $ 150. I said, hey what about those phones where you can get your email for $ 399...it was like I was talking about going to the moon for a meal.

    Look it. I pay Sprint $ 150 for me and my wife every month. That is $1800 a year!

    The ONLY REASON I happen to S T A Y with Sprint is the Treo. I look at those unlimited plans talk all you want for $ 35 a month too.
    How much would you pay for a color pda?
    Wireless phone? you prolly want it free, cuz you spend SO much a year. <smile>

    I want better coverage.. I want my sprint EVERYWHERE... ummm you think they might want to put up a few more towers? Kinda hard with NIMBY attitudes.. .and that costs money. Sprint(not pcs) is in shambles.. local POTS lines arent money makers anymore. I switched my home phone to CABLE, cuz it's 10/month, and I never use it. I gladly pay 100/month for my cell, I can call anyone, anywhere, FROM anywhere that pcs is, which is damn near everywhere I have been. I'd like stronger coverage in some spots, dont we all The 35/month carrier here in south florida has OK coverage, but it's unlimited local, LD is extra, and that's not practical for me, but great for others... again coverage isn't the best.

    back to point. I want better wireless web than my current phone has, I want the screen, the SD slot for mp3's, and the camera, as always, is just a cute lil toy. It has everything I need in one.
    500 is right in line, and my credit card is anxious. Oh yea, and I dont have to change my plan. I pay 100, and I am daring myself to ever go over my minutes. I use over 3k a month, and with unlimited web, etc.. come on.. it's reasonable.

    Your 1800/year is important, it gives you leverage when you have a problem, or want to make a change, otherwise you're just like the rest of us... helping them buy towers, and make the service better. That's what I HOPE at least

    -Brian
  9. #9  
    Originally posted by mgauss
    No, no y no!

    Look it. I pay Sprint $ 150 for me and my wife every month. That is $1800 a year!

    The ONLY REASON I happen to S T A Y with Sprint is the Treo. I look at those unlimited plans talk all you want for $ 35 a month too.

    Speaking strategically, then, Sprint really has $ 1800 in potential revenues for next year dependent on my preferences, and I am thinking here NOT of Sprint, but of a phone.
    Sounds like you should really be complaining about Sprint not subsidizing the phone instead of Handspring trying to recoupe their costs. I agree that Sprint should probably give something like a $200 credit if you are willing to extend your contract for 2 years. They could even have a clause that if you leave before the 2 years then you owe them the $200 + the normal termination fee.

    But Handspring does have to try to make as much money as possible off the Treo 600 when it is initially released because they will have to eventually discount it like they have with the 300 in about a year or so. No company can simply right off their R&D, they have to recoupe that money some time or they will go out of business. Neither Palm nor Handspring is really doing that great lately as the handheld market is saturated and Microsoft is gaining share. The Treo is a differentiator for Handspring/Palm so they have to use that advantage while they can.
  10. #10  
    mgauss, I'll be the lone dissenter here and say that I agree with you 100%. At $500, this phone is way overpriced and Handspring can expect them to sell about as successfully as the original Treos did. I suspect that a large percentage of current Treo owners didn't buy them until they hit the $300 price point. And in today's market, even $300 is awfully expensive. You can get a Nokia 3650 for free and the hardware costs really shouldn't be much different between the two.

    Furthermore, based on the quality of the pictures taken with the Treo 600 that have been trickling out, I'm not sure if we can really count that as a value added feature.

    Scott
    Now THIS is the future of smartphones.
  11. #11  
    Originally posted by mgauss


    The ONLY REASON I happen to S T A Y with Sprint is the Treo. I look at those unlimited plans talk all you want for $ 35 a month too.

    And Sprint in the only one that will support the Treo ? Hello T-Mobile, or ATT or even Cingular. You, sir, have options.
  12. #12  
    Originally posted by mgauss
    Today's economy is tough. Also really the money is not in the device but in getting new LOYAL customers for the phone companies. Plus the individual parts of the 600 add up to $ 299 in retail dollars.

    Also, what is happening is the pricing is like coming as if Handspring was getting its "R&D" money back. Palm does not need to "make that back." What Palm needs is to establish itself in the next generatino phone before Microsoft eats up that market.

    Ignoring R&D, to spit out one more treo w 600 would cost $80. So they can sell it for $ 299 easy.

    Go ahead, be pigs in this economy. You are just opening it for Samsung to come in and clean up.
    There are so many reasons why this is a faulty argument, but I will try to limit my response to just a few.

    1. Your assumption that Palm/Handspring needs to get there first in order to beat Microsoft, is flawed. This has never worked in the past. Rarely is the battle against Microsoft decided in the first or second round. I generally takes several iterations of a product (and boatloads of money) before Microsoft delivers something that is (good | usable | acceptable | not complete garbage). Many companies have beaten M$ in the first round, few are still around today to any degree. Price-dumping is not the way to win. Heck, even having a better product than M$ usually doesn't win against them. Getting there first may help, but it is not the way to win either. If I knew the way to beat Microsoft, I would be a trillionaire (not a word, according to dictionary.com. Perhaps Mr. Gates will take care of that, too).

    2. If they (Palm/HS)don't recoup R&D, how do they make money? Volume over time? Not likely. Remember, these are cellphones we are talking about -- one of the most rapidly changing product landscapes there is. People upgrade cellphones more often than they upgrade computers, VCRs, or even wristwatches. The window of opportunity for any new phone is very slim, and money needs to be made while it can be made (profound, no?). On a side note, the maximum projected useful life of the treo 600 is 2 years. The battery will be dead in two years. Planned obsolescence. They can get away with this because most people upgrade their cellphones at least once every two years anyway (usually more often than that).

    3. With which sub-$500, comperable, palmOS5-based phone is Samsung going to "clean up"?

    4. Please tell me where I can buy all the parts and system software needed to make my very own Treo 600 knockoff for $300. Sounds like a fun project.

    5. Palm/HS would not sell the Treo 600 for $300 even if it cost a nickel to make. If it were just HS, maybe. Call me cynical, but methinks the merger may have at least had some role to play in pricing this product (probably). It would be in direct competition with the Zire 71. The Zire has a 320x320 screen going for it. The treo has -- keyboard, phone, web, email, potential voice memo, etc. Not a tough decision for most of us (there are some people who don't need the phone/web and would choose the high-res screen, but it is not worth the risk to Palm). By pricing it in the $400-$500 range, they place it where it belongs -- in their business line of products -- competing with the T2 and C (I left out the W on purpose, so will Palm). In this class, the differentiating factors are memory, resolution, processing power, and type of connectivity. With the SD slot, onboard memory is pretty much a non-issue. The Treo loses on resolution, and ties for second with the T2 on power (and lets face it, the palm OS has never been about having the most horsepower, but getting the most out of the power you have). The people who are looking for a phone and Palm in one device will (grudgingly) accept the lower resolution screen. The people who only want a palm will get the T2 or C. The people who get the C, thinking they will have WiFi access to the web everywhere they go, probably spend way too much time at Starbucks ("but I have Wifi at my office and at home, I can use the web there too". Yeah, you also have a computer at your office and at home). But I digress.

    6. Yes, the phone companies want loyal customers, but that is not Palm/HS's concern. That is a good argument for phone company to offer incentives for signing long-term contracts. Most of them already do this.

    As I expected, my reply is long-winded and often meandering. I would trim it down, but I'm afraid I do not have time, so I will just send it as-is.

    I would love for the Treo 600 to cost less, but it just isn't feasible, at least not at product launch.
  13. BigTex's Avatar
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    #13  
    I think the above reply by Guessed is 100% correct. HS will probably do to the TREO what Palm did to the Tungsten Line introduce at top price point for max profits from early adopters than move price point down when sales fall off.

    The Samsung SGH-i500 is currently selling for $699.99 from http://www.just-talk.com/phone_det.php?phoneID=106
    The T600 at $500 will be a deal. My guess is that HS upgraderers will be able to purchase for $449.00 at launched for an unlocked model and with carrier subsidies we will see a $449 - $399 price tag.

    BigTex
    Waiting for Palm Pre on AT&T then can replace my iPhone. Needs Doc To Go and Flash

    Mutley - Passed 4-18-06. A better friend one could not ask for!
  14. #14  
    Originally posted by BigTex
    The Samsung SGH-i500 is currently selling for $699.99 from http://www.just-talk.com/phone_det.php?phoneID=106
    Hah! And it won't even be available until next year!
  15. #15  
    Originally posted by guessed


    There are so many reasons why this is a faulty argument, but I will try to limit my response to just a few.

    1. Your assumption that Palm/Handspring needs to get there first in order to beat Microsoft, is flawed. This has never worked in the past. Rarely is the battle against Microsoft decided in the first or second round. I generally takes several iterations of a product (and boatloads of money) before Microsoft delivers something that is (good | usable | acceptable | not complete garbage). Many companies have beaten M$ in the first round, few are still around today to any degree. Price-dumping is not the way to win. Heck, even having a better product than M$ usually doesn't win against them. Getting there first may help, but it is not the way to win either. If I knew the way to beat Microsoft, I would be a trillionaire (not a word, according to dictionary.com. Perhaps Mr. Gates will take care of that, too).

    2. If they (Palm/HS)don't recoup R&D, how do they make money? Volume over time? Not likely. Remember, these are cellphones we are talking about -- one of the most rapidly changing product landscapes there is. People upgrade cellphones more often than they upgrade computers, VCRs, or even wristwatches. The window of opportunity for any new phone is very slim, and money needs to be made while it can be made (profound, no?). On a side note, the maximum projected useful life of the treo 600 is 2 years. The battery will be dead in two years. Planned obsolescence. They can get away with this because most people upgrade their cellphones at least once every two years anyway (usually more often than that).

    3. With which sub-$500, comperable, palmOS5-based phone is Samsung going to "clean up"?

    4. Please tell me where I can buy all the parts and system software needed to make my very own Treo 600 knockoff for $300. Sounds like a fun project.

    5. Palm/HS would not sell the Treo 600 for $300 even if it cost a nickel to make. If it were just HS, maybe. Call me cynical, but methinks the merger may have at least had some role to play in pricing this product (probably). It would be in direct competition with the Zire 71. The Zire has a 320x320 screen going for it. The treo has -- keyboard, phone, web, email, potential voice memo, etc. Not a tough decision for most of us (there are some people who don't need the phone/web and would choose the high-res screen, but it is not worth the risk to Palm). By pricing it in the $400-$500 range, they place it where it belongs -- in their business line of products -- competing with the T2 and C (I left out the W on purpose, so will Palm). In this class, the differentiating factors are memory, resolution, processing power, and type of connectivity. With the SD slot, onboard memory is pretty much a non-issue. The Treo loses on resolution, and ties for second with the T2 on power (and lets face it, the palm OS has never been about having the most horsepower, but getting the most out of the power you have). The people who are looking for a phone and Palm in one device will (grudgingly) accept the lower resolution screen. The people who only want a palm will get the T2 or C. The people who get the C, thinking they will have WiFi access to the web everywhere they go, probably spend way too much time at Starbucks ("but I have Wifi at my office and at home, I can use the web there too". Yeah, you also have a computer at your office and at home). But I digress.

    6. Yes, the phone companies want loyal customers, but that is not Palm/HS's concern. That is a good argument for phone company to offer incentives for signing long-term contracts. Most of them already do this.

    As I expected, my reply is long-winded and often meandering. I would trim it down, but I'm afraid I do not have time, so I will just send it as-is.

    I would love for the Treo 600 to cost less, but it just isn't feasible, at least not at product launch.
    well said... well said.
  16. mgauss's Avatar
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       #16  
    A smart course of action would be for Handspring to move about a million high tech high income techie types and "lock them in" with features they cannot get anywhere else.

    Free software, special nifty things they would lose (shortcuts such as typing the first letter of the first name and the last name) if they go somewhere else. Then evolve the evolutionary progress to stay competitive.

    An agressive price would help get the million users. Right now the number of Treos out there is pathetic. And you know, there are a lot of people out there who need it.

    If Handspring fails to capture the first bubble in the growth share matrix and waits for an agressive step from Samsung (which is breaking the UX into a million pieces as we speak) it will never catch up.

    But silly me, I don't know why I obsess about a company that does not even exist anymore. And Palm just does not have heart. Sony does.
  17. #17  
    Originally posted by mgauss
    A smart course of action would be for Handspring to move about a million high tech high income techie types and "lock them in" with features they cannot get anywhere else.
    This would be what EVERY company is trying to do.

    Free software, special nifty things they would lose (shortcuts such as typing the first letter of the first name and the last name) if they go somewhere else. Then evolve the evolutionary progress to stay competitive.
    As long as we are assuming high tech techies, we might as well assume that they can hack that in... oh... 3 days?

    An agressive price would help get the million users. Right now the number of Treos out there is pathetic. And you know, there are a lot of people out there who need it.

    If Handspring fails to capture the first bubble in the growth share matrix and waits for an agressive step from Samsung (which is breaking the UX into a million pieces as we speak) it will never catch up.
    There's a market boom that's about to happen? You better go on a stock buying rampage on NASDAQ tomorrow...

    But silly me, I don't know why I obsess about a company that does not even exist anymore. And Palm just does not have heart. Sony does.
    don't worry... everybody else on the board is. hehe.
  18. #18  
    Originally posted by mgauss

    Go ahead, be pigs in this economy. You are just opening it for Samsung to come in and clean up.
    That's why the Samsung SPH-i500, which is technically far inferior to the Treo 600, costs $599 retail? And the Hitachi G1000 is $649 retail. Don't act like Handspring's prices are above some industry standard.
  19. #19  
    Originally posted by letsgoflyers81


    That's why the Samsung SPH-i500, which is technically far inferior to the Treo 600, costs $599 retail? And the Hitachi G1000 is $649 retail. Don't act like Handspring's prices are above some industry standard.
    There are a couple factors at play here. For some reason, Sprint has recently decided to start charging top-dollar for many of its smartphones. They were always more expensive through Sprint than through retail, but they seem to be pricing them even a bit higher now and some of the retailers that previously would sell these phones at a big discount (e.g. - Circuit City and Best Buy) either don't sell Sprint at all (CC) or seem to have stopped, or at least cut back, on carrying the smartphones (BB).

    Now, take a look at T-Mobile's offerings. Again, don't look at T-Mobile's site, look at the many places where you can get T-Mobile phones. Several of the smartphones there can be had for under $200. The Nokia 3650 can be had for free.

    So, yes, $500 is expensive and, IMO, overpriced. And if the prices don't get more in tune with the market, it's only a matter of time before T-Mobile and one of its manufacturers (e.g. - Nokia) hit upon a design with all of the positive aspects of the Treo 600.

    Scott
    Now THIS is the future of smartphones.
  20. #20  
    Originally posted by Scott R

    Now, take a look at T-Mobile's offerings. Again, don't look at T-Mobile's site, look at the many places where you can get T-Mobile phones. Several of the smartphones there can be had for under $200. The Nokia 3650 can be had for free.

    So, yes, $500 is expensive and, IMO, overpriced. And if the prices don't get more in tune with the market, it's only a matter of time before T-Mobile and one of its manufacturers (e.g. - Nokia) hit upon a design with all of the positive aspects of the Treo 600.

    Scott
    You forgot one very critical aspect: Time. Nokia 3650 has been out for quite a while. They call it an "old model" in Hong Kong. If I recall correctly, Nokia3650 cost a pretty penny when it first came out too? $450 or $600?

    I think there's nothing to fear from Nokia. They aren't after the same market. Look at the 10+ phone they have come out with (which looks the same and I still can't tell which is which), the closest one to a PDA combo is the 3650. The problem with that one was the Symbian OS and non-touch screen. Nokia is going after the mass market, they aren't going after techies like us.

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