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.

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.

In general, Malik said he looks for a single device that has voice and data capabilities for young doctors who might otherwise need to carry a phone separate from an online medical reference database. "Smart phones are becoming cheaper and our goal is to give the students one device instead of having six things in their pockets," he said.

More than 80 medical students at the school this year are using the iPhone , although the medical department constantly reviews devices for future deployment, Malik said.

Another feature in the Pro is a simple switch to turn on Wi-Fi usage. By comparison, the iPhone will search for Wi-Fi service continually, burning up battery power, unless a user turns off that feature, Adamine said.

Reviewers have generally liked the new Pro , which runs the Windows Mobile 6.1 operating system.

Phillippe Winthrop, an analyst at Strategy Analytics Inc., said the new Treo Pro is "on par" with other smart phones that run Windows Mobile, such as the HTC Touch Diamond. "I say it is 'on par' as a glass-half-full statement," Winthrop said. "Candidly, Palm has been struggling with innovating mobile handsets, but the Treo Pro shows they are back in the game."

He added it might not matter much to some IT managers that the device is unlocked. "Unlocked devices are an arrow in a quiver of wireless expense management," he said. "It's not the end-all and be-all."

Winthrop called Redman's comment that Palm is nearing its demise too severe. He said that Malik and other IT managers worried about Palm's record of lackluster innovation and financial difficulties should not ignore the Pro device. "There is no reason not to strongly consider the Pro device," he said. "Any fears about Palm's short-term financial situation are not warranted."

However, Winthrop said analysts and Palm customers are rightly concerned about what sort of new proprietary Palm OS, based on Linux, that Palm will develop. The new operating system is designed for products targeted at consumers. "Palm knows that if they don't get that Linux OS right, they're done," he said. "This is make or break for Palm."

This story, "Treo Pro unlocked in bid to lower roaming costs" was originally published by Computerworld.

Copyright © 2008 IDG Communications, Inc.