Palm Pre Will Nab iPhone Users, Says Palm Investor

With the two-year anniversary of the original iPhone coming up, Palm investor Roger McNamee predicts customers with expiring contracts will flock to the Palm Pre.
This summer will be the perfect time for Palm's new Pre smartphone to nab customers who purchased the original iPhone, Palm investor Roger McNamee said Thursday.

The Pre is schedule to come out in the first half of this year, and it will be an exclusive for Sprint. Powered by webOS, the Pre is targeting a similar demographic that bought the iPhone.

Palm Pre Smartphone

Palm 'Pre' Smartphone
(click for larger image)

"You know the beautiful thing: June 29, 2009, is the two-year anniversary of the first shipment of the iPhone," McNamee told Bloomberg. "Not one of those people will still be using an iPhone a month later."

McNamee, who is the co-founder of Elevation Partners, characterized iPhone buyers as people who wanted the "coolest product on the market." McNamee sees the Pre, with its touch screen, slide-out keyboard, and innovative user interface, as the latest must-have gadget.

Elevation Partners, Palm, and Sprint have a lot riding on the release of the Pre. Elevation has invested more than $425 million in Palm over the last two years, and it's looking for a sizable return. Palm was once the king of the U.S. smartphone market, but it has steadily lost customers to Apple and Research In Motion's BlackBerry. It's banking on the Pre and webOS to lead it back to prominence.

Sprint was the only major U.S. carrier to lose customers during the last quarter, and it continues to see subscribers leave for its rivals. By having the Pre as its flagship handset, Sprint could have a compelling alternative to AT&T's iPhone 3G, Verizon Wireless' BlackBerry Storm, and T-Mobile's Android-powered G1.

Apple likely won't rest on its laurels when the iPhone's two-year anniversary arrives. The company has developed a pattern of releasing a new smartphone during the summer, and many industry watchers expect a beefed-up iPhone later this year.

Each year, InformationWeek honors the nation's 500 most innovative users of business technology. Companies with $250 million or more in revenue are invited to apply for the 2009 InformationWeek 500.

Editor's Choice
James M. Connolly, Contributing Editor and Writer
Carrie Pallardy, Contributing Reporter
Shane Snider, Senior Writer, InformationWeek
Sara Peters, Editor-in-Chief, InformationWeek / Network Computing
Brandon Taylor, Digital Editorial Program Manager
Jessica Davis, Senior Editor
John Edwards, Technology Journalist & Author