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Palm Pre Over at Techdirt there’s an editorial suggesting that the Palm and Sprint should get together to set a new price for the Palm Pre: Free. It's an interesting idea, but I don't think it's a good one -- at all.

The first and strongest reason to drop the price to free: More Palm Pre phones sold, more users, bigger install base. As many developers have said, they aren’t going to develop for a platform until it is adequately established (they need to know there are customers first). To point to Apple’s App Store success is to forget that the App Store didn’t launch until a year after the iPhone, meaning there was an established user base before developers even had the SDK. That’s not the case with Palm, which we know had the SDK out before launch (as indicated by the apps in the Catalog), but clearly they’re taking the time to make sure they do the App Catalog right. More users would surely be good for the platform, but given that the Pre is a 1.1 device on only two carriers in only two countries at the moment, even at 'free' there's a ceiling to just how many of these Palm could reasonably expect to sell.

(As an aside, there was also the suggestion that Palm should have delayed the Pre until the SDK was available. The Pre had to be launched when it was, mostly because of the iPhone 3Gs. Palm and Sprint had both a deadline (first half of 2009) and the competition to consider. Publicity-wise, Palm got far more coverage for the audacious pre-3Gs launch than it would have gotten for a delay (bad coverage) putting it after the iPhone.)

Which brings us to the last point: knocking $200 off the Pre’s price tag and making it free on a contract. The problem here is one of perception. If something’s free there are two thoughts that come to mind: it’s not that great (most currently free-on-contract phones) or there’s some sort of catch. Considering that this is supposed to be the next great smartphone, the perception is that it should cost a pretty penny. Quite simply, it’s the perception of quality - expensive things cost a lot, therefore something that costs a lot should be a quality product.

Finally, let's face it - that $200 has to come from somewhere. Sprint surely wouldn't pay it - they love the Pre, but they're not willing to bet the entire network on it. Palm wouldn't take the hit either - they frankly can't (and shouldn't) afford to. No, with the current costs and carriers for the Pre, it's a safe bet that were it free, the customer would somehow end up paying that extra $200 in the form of longer contracts, higher fees, or via some other nefarious means.

What do you think the subsidized price of the Palm Pre should be?