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By John Biggs

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If you were reading a major paper this weekend, you’d notice a striking ad. There’s the Palm Pre resting against an eaten Apple with the words:

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 real call to action was to iPhone users with lapsed contracts - presumably iPhone users who bought the original iPhone two years ago and never upgraded to the 3G - a cohort that I suspect consists of perhaps five Palm engineers and maybe our tech-savvy grandparents. It’s a small number, friends. A small number.

Their claim - that people will switch when they’re out of contract - is ludicrous. It appeals to a fringe of users who, like Soviet defectors, hated Coca Cola and capitalism so much they they flew over to Central Europe and turned themselves in as American defectors. How many were there? A few hundred, at least, but life under that regime was probably much harder and less appealing than life with Mickeys Mouse and Mantle.

I’ll agree that the Palm (PALM) is compelling - for current Sprint customers locked into the service due to geographic issues or coverage problems. More power to those folks. Considering the dearth of smartphones worth a damn on Sprint, they deserve a nice upgrade. But for current AT&T customers to flock in droves is an exercise in magical thinking.

“Your iPhone contract is up. Perfect Timing.” Mmmhmmm. It’s perfect timing for those who randomly purchased an iPhone and then put it in a drawer for two years, convinced it was stealing their precious bodily fluids.

Reuters found that 90,000 to 100,000 units were sold with the expectation that 500,000 were made at launch. Thirty-four percent - 34,000 on the high end - of those went to new customers. The 3GS sold 1,000,000 last weekend. There is clearly little, if any, defection going on here.

Is this the best you can do, Palm?

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Source: Palm: Is This the Best You Can Do?