Sprint's new Android phone a threat to Palm

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Sprint (S) revealed that it will launch a new phone using the Google (GOOG) mobile software system. The handset, the HTC Hero, is built by one of the largest cell phone manufacturers in China.

Google, which has faced relatively modest acceptance of its Android handset operating system, was more than a little bit excited by the announcement of the deal. In a press release the firms said, "HTC Hero is the first U.S. device to feature HTC Sense, an intuitive experience that was built with a guiding philosophy to put people at the center and allows the device to be completely customized to the wants and needs of the user."

Whatever happened to Sprint's enthusiasm for the Palm (PALM) Pre, which was supposed to be the centerpiece of the cellular carrier's push into the smartphone market? The answer is that the Pre is being left behind. Its operating system is considered relatively immature as a platform for outside developers, which could limit its value to developers and customers.

On September 2, Town Hall Investment Research analyst David Eller was quoted in Barron's saying that that sales of the Pre "are continuing to slow," and "likely will come in dramatically below" Sprint's reputed target of 1 million to 1.5 million customers for the year.

If the new HTC handset does well, Sprint may cut back its aggressive marketing of the Pre, and Palm may go back to its position of being an "also ran" in the smartphone industry.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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