Rumor Mill: Verizon dropping support for Palm Pre

Verizon Wireless has decided to abandon its support for the Palm Pre, according to a report on TheStreet.com. However, in the wake of the report, Palm reiterated its outlook for the coming year and its planned product and carrier launches in the second half of Palm's fiscal year ending in May 2010. Further, a range of analysts predicted Verizon would launch the Pre, despite the report.

TheStreet.com report, citing unnamed sources involved with Verizon's plans for the Pre, said that the carrier has dropped plans to launch the smartphone in January. The sources said that Verizon chose not to support the Pre for several reasons, including a perceived lack of success at Sprint Nextel, the current exclusive U.S. provider of the phone. (Last week, Palm said that the "vast majority" of its 823,000 smartphone shipments in its past quarter were the Pre.) Additionally, the report said Verizon felt that its VCast application storefront would compete with Palm's webOS App Catalog, and that Verizon wanted to focus on promoting BlackBerry devices from Research In Motion and a Motorola Android phone.

However, the report also said that Verizon might order a small number of Pres, but not lend strong marketing support to the phone.

As recently as July, Verizon Communications COO Denny Strigl said that Verizon Wireless would offer the Pre early next year. In May, Verizon Wireless CEO Lowell McAdam said that "over the next six months or so you will see devices like Palm Pre and a second generation Storm" on Verizon's network.  

While the loss of Verizon as a partner would be a blow to Palm's hopes to expand the reach of webOS beyond Sprint, it is not entirely clear if Verizon ever figured into its plans. As noted by John Paczkowski on the AllThingsD blog, Palm reiterated its outlook, meaning that a loss of Verizon presumably would not impact its business for the near future.  

Verizon spokeswoman Brenda Raney declined to comment, telling FierceWireless that the carrier does not comment on rumors or speculation. A Palm spokesman could immediately be reached for comment, but a Palm representative told TheStreet.com that Verizon had never been named as one of its partners.

Palm has been gradually expanding Pre distribution internationally with carriers in Canada and Europe, and recently introduced a follow-up device dubbed the Pixi.

For more:
- see this TheStreet.com article [1]
- see this Bloomberg article [2]
- see this CNet article [3]
- see this AllThingsD blog post [4]

Related Articles:
Palm smartphone shipments drop by 30% [5]
Palm debuts Pixi, cuts Pre's price [6]
Palm potpourri: Sales estimates rise, suitors sighted and UK launch predicted
[7]McAdam: Verizon to sell Palm Pre, Android phones [8]

Article updated Sept. 28 to include more commentary.

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