As iPhone contracts expire, Sprint and Palm wait with open arms

Early adopters, Sprint is gunning for you.

The company unveiled an advertisement today that targets a very specific demographic: those who bought an iPhone in June 2007. The ad, posted on Facebook this morning, seems to hearken back to the '80s Sega commercial "Genesis does what Nintendon't."

The Palm Pre does things the iPhone can't. Run multiple applications at the same time with real-time updates and even save $1200 over two years. It's the perfect time to join the Now Network, America's most trusted 3G network, bringing you the first and only 4G network from a national carrier.

The ad lands just as the original crop of iPhone owners reach the end of their two-year contracts. What better time to ditch AT&T, argued Roger McNamee, whose investment firm reinvigorated Palm several years back.

June 29, 2009, is the two-year anniversary of the first shipment of the iPhone. Not one of those people will still be using an iPhone a month later. Think about it -- if you bought the first iPhone, you bought it because you wanted the coolest product on the market. Your two-year contract has just expired. Look around. Tell me what they're going to buy.

To be fair, a week after that March interview with Bloomberg, Palm said that McNamee's statement was an "exaggerated prediction of consumer behavior pattern and is withdrawn." Recantation or no, the tactic is back.

By the numbers

With the launch of the iPhone 3GS, Apple sold one million iPhones last weekend. Pre's opening weekend saw 50,000 sales, and an additional 100,000 this month. It's hard to predict if closeted Pre fans are waiting patiently for their contracts to expire before switching to Sprint.

However, Wall Street feels confident. Palm's share price jumped 16 percent today after the company reported its results for the latest quarter. The ticker closed at $16.22 today, the highest it's been since Oct. 2007, when a dividend payment depressed the stock value. Palm had trouble buoying its stock, until it unveiled the Pre this January.

The Wall Street Journal reports that:

The exuberance among investors puzzled some analysts, who found little in Palm's results to give them a handle on the company's prospects. The company just introduced its first phone with a new operating system that will make or break Palm as it tries to compete with the iPhone and other smart phones. Palm appeared to be confident when reporting results late Thursday, saying that it could have positive cash flow by the second half of the recently begun fiscal year.

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