treo 650 cingular 3i no 24The demand for the unlocked Treo 650 GSM is so strong that Palm has decided to increase the price of the device by $100 to $699 from $599, infuriating the fans who where eagerly awaiting for the smart phone.

PalmOne is saying that the $599 price was a mistake and that they will honor this price for previous customers but The Treo 650 GSM will be sold for $699 from now on.

I don’t buy their pricing mistake story for one second. I believe that there are only two reasons why this would happen: First, PalmOne might raise the price just because they can. After all, there is a lot of demand, and I would not be surprised if the smartphone would fly off-the shelves for $699. Secondly, it is possible that the carriers are applying pressure on PalmOne to raise the price to entice customers to sign-in a 1 or 2 years contract.

Palm relies heavily on the cellphone carriers to finance the development of the device and to commercialize it. Sprint is probably the biggest investor, that’s why they had the exclusivity ($) until now.

Furious or not, I doubt that the fans will go away from the Treo 650 because there is no serious contender on the market and Palm knows it. They will gain some money in the short term, but is it worth what they lose in customer love? Possibly: Just like Apple fans, PalmOne fans are pretty hardcore, so I guess that as soon as the price goes down, they will forgive PalmOne.

I personally think that the pricing is way too high and even if the device is really good, I can only recommend waiting until the price becomes reasonable again.

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