palmOne raises price on Treo 650

[Colin Dunstan]

BargainPDA reports that palmOne raised the price of the unlocked Treo 650 by $100, according to palmOne due to a "pricing error." BargainPDA believes in a different scenario:

The most likely scenario is that Cingular was upset that many were buying the unlocked Treo 650 with the intention of using it on a competing network, like T-Mobile. TMo doesn't appear interested in carrying the Treo 650, but their GSM network supports it if buyers of an unlocked 650 insert their SIM card. So what's been good for Cingular in the past is now a problem since they're on the other side of the fence.

[doctorow]

This is very very bad. And Fool.com tells you why:

A strong launch is critical because as goes the Treo, so goes palmOne. The company has bet its future on the smartphone, hoping to use it to boost growth and offset a steep decline in the handheld market it has dominated for years. But that won't be easy: There are plenty of competitors to the Treo, and some of them are available at a substantial discount. Take Research In Motion's (Nasdaq: RIMM) new 7250, which was launched yesterday. No, it doesn't boast the camera, MP3 player, or Bluetooth compatibility found in the Treo, yet it does feature Web access, e-mail, and phone service all in one package. Inking a two-year service deal with Verizon (NYSE: VZ) will get you the device for at least $100 less than the 650. That's why "oops" simply isn't an answer palmOne can afford to give its investors right now. Or maybe ever.