Palm's Pixi

Photo credit:Sprint Nextel

Looking to ride the success of its highly touted if not hot selling Pre device, Palm Inc. this morning announced plans to launch a follow up device dubbed Pixi. The device, which like the Pre will be initially available exclusively through Sprint Nextel Corp., is expected to go on sale before the holiday shopping season and slot in below the price of the Pre, which in connection with the Pixi unveiling saw its full rebate price cut by $50 to $150 by Sprint Nextel.

The Pixi will sport the same WebOS operating system as the Pre, but will differ in form factor as its embedded keyboard will be on the face of the device below a smaller 2.6-inch touchscreen. The Pixi will include 8 gigabytes of internal memory and support for CDMA2000 1x EV-DO Revision A wireless technology, but lack the Wi-Fi available on the Pre. The new device will be the first device to run Qualcomm Inc.'s MSM7627 chipset.

Analysts have been anxious for Palm to unveil a follow up device for the Pre, which despite being overshadowed in sales by Apple Inc.'s iPhone has been a success for Palm. The additional sales of a WebOS-powered device is also expected to spur development of applications for Palm's application store, which in its infancy lags significantly behind efforts by Apple, Research In Motion Ltd. and Google Inc.'s Android operating system. Sprint Nextel's exclusivity on the Pre is set to run out in January as Verizon Wireless has said it plans to offer the device to its customers.

Palm's decision to go with Sprint Nextel on the launch of the Pixi did not sit well with investors as Credit Suisse downgraded the handset manufacturer based on its decision for carrier partner. Palm's stock was down just over 2% in mid-day trading having regained deeper loses earlier in the day. Sprint Nextel's stock was down earlier in the day but had gained momentum and was up slightly by mid-day.