Treo Pro unlocked in bid to lower roaming costs

Two very different tales are circulating about Palm Inc. and its new Treo Pro smart phone these days.

One story, from Palm and some analysts, is that the new Treo Pro's unlocked feature offers a cost-effective way for international business travelers to dramatically lower roaming costs. Travelers can insert a SIM card into the Pro from the carrier in the country they're in, potentially cutting those costs by 90%, Palm officials said.

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The other story, from a different group of analysts in recent weeks, is that Palm had to unlock the phone because it could not find a carrier willing to sell it. One analyst on Friday went further, saying that the inability to find a carrier to sell the Treo Pro is a sign that the troubled Palm is facing its ultimate demise.

"Palm loses a major distribution channel and any subsidy by not going through the carrier," Gartner Inc. analyst Phillip Redman said via e-mail today. Having to sell the smart phone unlocked "looks like the final death sigh" for Palm and follows years of struggles finding effective products to sell fending off financial difficulties, he said.

The new smart phone, available in the U.S. since Sept. 26, sells for $549, a premium price compared to the Apple Inc. iPhone 3G and some other competitors. The higher price is largely because the upfront hardware cost isn't offset by the guarantee of monthly service charges.

Mike Adamine, senior product manager for the Treo Pro at Palm, said Palm decided to unlock the device because business customers wanted to avoid draconian roaming costs when traveling. Palm's decision to include a SIM card slot for various carriers means IT managers can help users cut roaming costs that easily reach $500 a month for a single user who travels through two or three countries.

"There's already been a lot of demand for unlocked," Adamine said.

Wasik Malik, director of mobile solutions at the Ohio State University Medical Center in Columbus, Ohio, said the prospect of an unlocked device interests him. He has been testing a Treo Pro for three months before deciding whether to purchase more than 600 for use by medical students and residents in the fall of 2009.

Purchasing rules at the university require Malik to check out a variety of carriers for service, even though he realizes the GSM-based Treo Pro will only work with AT&T Inc. and T-Mobile USA Inc. networks. "Unlocked is important to us because we cannot bind ourselves with a single vendor for data and phone service," he said.