Palm Pre Lands in Canada

Bell Canada, the wireless subsidiary of BCE Inc (BCE - Analyst Report), is set to launch Palm Inc’s (PALM) Pre touch-screen smartphone today in Canada. The highly-anticipated smartphone will be available at Bell Mobility retail stores at a price of $199.95 on a three-year service contract ($599.95 without contract).

Palm Pre entered the US market in June 2009 on Sprint Nextel’s (S - Analyst Report) network. Since its launch, the handset has generated strong market response with around 90,000 to 100,000 units sold in the first week.

Bell Canada continues to experience decline in wireless revenue per user due to lower customer usage amid a weak economy and intense price war which forces customers to opt for cheaper price plans offered by competition. Additionally, wireless subscriber growth has slowed due to higher churn (customer switch) while the company’s major competitors Telus (TU - Analyst Report) and Rogers Communications (RCI - Analyst Report) continue to grow their respective subscriber bases at a healthy pace.
 
The Palm Pre is equipped with the ability to operate on a multi-tasking environment running several applications simultaneously. The device fits with the company’s CDMA wireless network platform, which is unable to carry the widely popular iPhones and Android-based smartphones. Bell Canada hopes to leverage Palm Pre’s multi-tasking functionality to increase minutes of use, thereby boosting ARPU (average revenue per user).

With the launch of Palm Pre, the company will be well positioned to counter stiff competition from iPhone which is exclusively marketed by Rogers Communication in Canada. Growing customer adoption of iPhones has contributed to increased churn levels at Bell Canada. The company expects that Palm Pre, which effectively complements its currently marketed BlackBerry devices, to improve subscriber retention moving forward.

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