Pre vs. iPhone: Which offers the better value?

The Palm Pre's slick new software and cool design may make it the first true iPhone challenger on the market, but the competitively priced service plans from Sprint Nextel make the device an even more compelling alternative for frugal cellphone subscribers.

Palm Pre

(Credit: CNET)

In terms of features, the Pre matches the iPhone on most bells and whistles . And it even has a few new capabilities not seen on the iPhone, such as an actual QWERTY keypad and the ability to have multiple applications open at once.

But for financially savvy shoppers, the Pre on Sprint's 3G network offers a value proposition that may just be enough to tip the scale when deciding between smartphones.

In terms of the upfront cost of the devices, the iPhone and the Pre are the same. The 8GB iPhone 3G costs $200, and so does the Pre with a $100 mail-in rebate. But it's really the service contract from Sprint that sets the Pre apart from the iPhone from a cost perspective.

"Feature for feature these phones are very comparable," said Peter Pham, CEO of Billshrink.com, a Web site that helps consumers cut waste out of their monthly bills. "But when you look at the total cost of ownership, the Pre on Sprint's network offers better value for many consumers."

Here's a breakdown comparing the two service plans:

Palm Pre (Sprint)

•  $200: cost of phone with $100 rebate
•  $70 per month: 450 voice minutes with unlimited messaging and data
•  $90 per month: 900 voice minutes, unlimited messaging and data
•  $100 per month: Unlimited voice minutes, messaging and data

iPhone (AT&T)

•  $200: cost of phone
•  $90 per month: 450 voice minutes, unlimited messaging and data
•  $110 per month: 900 voice minute, unlimited messaging and data
•  $150 per month: Unlimited voice minutes, messaging and data

The iPhone and the Pre each require a two-year contract. This means a power user, who subscribes to an unlimited everything plan would pay $3,600 before taxes and fees for the iPhone on AT&T's network. The same customer, getting a comparable service from Sprint, would pay $2,400 before taxes and fees. Over the two-year contract period, the Sprint Pre customer will save a total of $1,200.

While it seems pretty clear that the Pre from Sprint offers a better value, Pham said many consumers don't look at the total cost of ownership when shopping for a new phone and are often surprised down the road when they look at their phone bills.

"Most people don't realize how much they are paying for their service until they are about six to seven months into their two-year contracts," he said. "And then they start to realize that their bills are really high."

Pham also said most cell phone subscribers overpay for their service.

"I would say that eight out of 10 cell phone users are overpaying for the service they use each month," he said.

He suggests consumers use a tool on billshrink.com that analyzes cell phone bills to see when the most calls are made and to whom. The tool provides a summary showing consumers how many of their calls are free calls made to other people using the same cell phone network or calls made during nights and weekends. The tool also offers suggestions for new service plans that better fit the consumer's needs.

It will be interesting to see if Sprint's lower cost plans tips the scale for potential Pre customers. If it does, it will also be interesting to see if AT&T and other carriers, such as Verizon Wireless, which is also expected to get the Pre, will lower their prices to compete.

[monkeyfun14]

How dare you say that an Apple is more expensive then the competitor!

The OS is always worth the $1200 difference didn't you know?

[myles taylor]

Whoa, so you thought you'd start the comments off by flaming? First thing eh? Just to get the juices flowing.

[Someone-else]

But with that $1200 you not only get the OS, you also get a Shiny Apple logo!!!!!!! Which by itself is already worth much more than the $1200!!!!!!

[monkeyfun14]

Hey everyone else does it why can't I do it once or twice.

[stevicus]

"Hey everyone else does it why can't I do it once or twice."

how old are you?

[Flytrap]

"Hey everyone else does it why can't I do it once or twice."

You can only get it after you are married... and even then just once a month <grin>

[mclaurin10]

No one gives a flying quack what OS you use or like, or what you value, people may disagree with you, its the sign of a very immature person to try to get those people pissed off.

[DarkHawke]

Geez, guys, grab a sense of humor, why don't ya? Or did the ironic fanboy line cut too close to home, maybe?

[peterpv]

i think monkeyfun14 was just monkeying around and having some fun.

we all know that his statement wasn't true.
it's only Apple lovers that believe that.

[clamenza]

The vitriol against this humorous post shows the truth draws blood - and makes comedy.

[ikramerica--2008]

Again, it's not pointed out that if one should not want "unlimited text" one does not have to pay the $20 fee for it. While I think it's stupid it costs extra at all, not all iPhone users are teenagers who need more than 1500 texts a month (50 a day), so at minimum, that's $5 less. For someone such as myself, 200 texts is plenty (I do about 3 a day), so it's only $5. For people like my Dad, who sends maybe 1 text a week on his iPhone, that's $0.80 a month. For many, because of email and twitter and facebook and whatever else all available on the iPhone, the need for texting does drop compared to a "dumb phone" of the past (same for the pre).

Is it dumb that ATT charges for texting in an unlimited data plan phone? yes. Does that mean it should be included in the cost in every comparison ever printed? No.

For me, the costs are comparable ($5 more for the iPhone, but for the integration with my Mac and MobileMe service, worth it). Especially because my whole family is on ATT, so the calls between us don't cost me minutes, and that keeps me under 450 for non-family, non-nights and weekend calls per month.

For a power user/phone addict, the Sprint Palm Pre is CLEARLY less expensive ($600 a year!).

It all depends on how you use your phone.

[danielwsmithee]

For my the costs are identical since I only send 2-3 text messages per month.

[michael_j_x]

To be completely honest though, I used to text a lot more before going on the iphone, because I can't be bothered using the software keyboard. Having a qwerty keyboard will be a big plus for me, and I will most definitely see my texting usage rise.

[dcmichie]

1500 a month haha what teenager are you talking about? Try 5,000-12,000 a month. I agree that its stupid that it costs at all, since it doesn't cost the carriers a single penny.

[mgarcia85]

The article points out very good points about both phones and services, the thing that bothers me as a consumer who really wants to know which one is better is the fact that few articles reveal how efficient and helpful the thousand of apps that the iPhone can have are to the average person whether you are a teacher, student, entrepreneur or anyone else. I do happen to like the Palm Pre but when compared to all the things I can do with my iPhone, it is worth paying the little extra money. Really wish articles would be more detailed about their reports.

[FearNo1]

IMHO there are only a few "helpful" apps for the iphone. Most of the apps are junk...

[myles taylor]

@mgarcia85 I completely agree. When the app store first launched I thought it was a gimmick and wouldn't have anything useful, but the amount of things I can do with my phone (or my iPod Touch, which is what I had when the App store was launched) seem to be limitless.

@fearno1 I'm guessing you don't use either one which is why you think most of the apps are junk. Sure, there are a fair share of junk apps out there, but there are a lot of great ones too.

[samkass]

What bothers me is that they're comparing a Pre that doesn't exist yet with an iPhone that's been out for a year. Any real comparison is going to have to wait until Apple's WWDC announcement and a Pre that you can actually go out and buy.

@FearNo1: Surely you can find a few dozen fun, useful, and interesting apps out of the 30,000 or so on the store. No one expects you to fill your iPhone with thousands of applications.

[Seaspray0]

@samkass. Correct, the pre is not available yet. The comparison was on specifications alone. But those specifications are not going to change when the pre is available, so the specification comparisons are valid now. When the pre becomes available to reviewers, we'll no doubt see reviews on functionality.

[Grigsby_51]

The iphone apps are a classic example of apple marketing to the bottled water crowd.
The best phone and software combo ever developed (so far) is the blackberry. The iphone stuff is for kids and dinks.

[macrhino]

monkeyfun14 must actually be 14. His/her comments are that mature. What an a**.

I need a real phone. One that works in overseas systems and is not on the garbage sprint network. The pre's keyboard will be really slick in landscape mode don't you think? I guess Apple just can't make a hardware keyboard, right?

Here's MY PREDICTIONS.
1. In 6 months there still WILL NOT be PRE 'clones"
2. In 12 Month Palm will be bankrupt.
3. In less than 1 year monkeyfun14 will get a real phone and not a non-working sample.
4. Nobody, Not even the dumb people, will still believe in an "iPhone Killer."

"While it seems pretty clear that the Pre from Sprint offers a better value," as to this drivel, it is worse than useless. I am not going to trade my Lexus for your Yugo no matter whick fool thinks it is a "better value." The strangth of the iPhone is not its feature set. It is its usability. The Pre is not even close.

BYE BYE Palm, nice while you lasted.

Disclosure: SHORT PALM.

[monkeyfun14]

Apple fans can bash on any Windows product and not have one thing mentioned to them but god forbid someone bash an Apple product without being called immature I don't see you jumping around making comments like this to AppleRocks and his crew.

[docster87]

I for one can accept constructive Apple bashing, there are actual points to bash on both Macs and iPhones, however Monkeyfun's original comment was a mere jab. What I don't like is how Apple can be so ignored and misunderstood by people that have never used their products. Why so much hate for a company that isn't a threat to Microsoft?
Many Window fans point to the fact that Apple has no games and limited apps. Yet in the mobile market Apple actually has more games and more apps than Windows Mobile. Plus on desktop, my iMac can run Windows XP and Linux, so I have access to all Window apps plus the MacOSX only apps that Windows can't run.
Yet it really doesn't matter. From DOS 5.0 through XP I used Windows, and Microsoft lost me. After a few months playing with an 'underpowered' Mac I switched. I've used both Windows and Macs and I prefer Windows and no amount of blind bashing can change my mind. If you've got Mac experience and want a real debate, I'm open for debate. But if you've never used a Mac, then how can you really declare Windows as better?

If the Pre can have 3rd party develop a ton of apps, it would be a real challenge to the iPhone. If the Pre can be hooked up to a TV and play movies & TV shows, it would aid in the challenge. But even then I doubt that I would switch from the iPhone experience I've enjoyed for past two years.

[BogusBasin]

Be very very careful what you say to monkeyfreak14. He will have you banned. Like a tattle tail to the teacher.

[docster87]

Meant to say I prefer MacOSX, NOT Windows.

[monkeyfun14]

@BogusBasin

When have I tattled on anyone?

I don't even know what pops up when you click the report button.

[Vechs]

@ docster please do not confuse the products of windows as a pc operating system and business phone platforms, they are quite different, and serve differing purposes. And in all honesty, Apple is very much a threat to microsoft in numerous markets, and apple has fans, microsoft has solid, cost effective, products.

[Seaspray0]

@monkeyfun14. Actually, the apple fanboys do have more than one thing mentioned to them. Specifically if they post biased, skewed posts. They are getting even with your posts. Does that mean we have ballance in the universe?

[clamburgler]

@ macrhino - you must have helped yourself to the entire apple flavoured kool aid jug. Your comments are laughable. I really wish people would stop comparing Apple to luxury cars, and PCs to cheap cars. Apple is like a Lexus - priced like a German luxury car, but at the end of the day it's still just a fancy toyota.

you said:
"Here's MY PREDICTIONS.
1. In 6 months there still WILL NOT be PRE 'clones""

- There are clones of lesser phones out there, so you can count on a Pre clone soon.

"2. In 12 Month Palm will be bankrupt."

LOL! Palm was still alive without the Pre, and they will do just fine now.

"3. In less than 1 year monkeyfun14 will get a real phone and not a non-working sample."

If he wants a real phone i suggest he not get an iphone. We all know how the call quality is on the iphone, texting limitations, copy and paste, multitasking, lack of hardware keyboard.

"4. Nobody, Not even the dumb people, will still believe in an "iPhone Killer." "

It's silly to think that the iphone will always be the best thing out there. Things change over time and who knows something better may come along in the future. And a little competition only helps everyone out in the end.

as for MY PREDICTION: You're an apple fanboy who will refuse to look at other brands in a positive way. Keep bending over for mr turtleneck!

[hipposareevil]

the $1200 difference is for the unlimited. It could be as low as $480 over 2 years if you take the other plans. Let's not be dramatic in our comparisons.

[lmutis]

Sorry monkeyfun14 but that is the reason the Iphone is so successful. Apple people love their Iphones. No article has ever mentioned the app store in their reviews and the fact that the newest Iphone is now 9 months old and nobody has been able to catch up with it. Everyone is looking for the Iphone killer, or the Ipod killer and its not gonna happen and that's because Apple puts usability and innovation first, the Iphone is not a gimmick, it is incredibly easy to use and it expands to fill your needs and that is why there will not be an Iphone Killer

[Perry_Clease]

Once again as an AppleFanMan I pretty much agree with you, particularly in regards to the App store. However, 30 years ago who would have thought that two of our major auto manufacturers would be going down in flames, it will happen to Apple eventually. That being said I don't see four horsemen heading for AppleLand any time soon. If anything Apple is one of the current riders, how little time has the iPhone been on the market and it is already setting the bar.

[Seaspray0]

It took about a year before apps were made available to the iphone. Can you be sure that apps won't be made available to the pre in the future? For today, yes the iphone has the advantage in apps. We will have to re-evaluate that later down the road when/if things change... I'm guessing about a year from now.

[Perry_Clease]

Me being an AppleFanMan not withstanding, it is probably too early to make a comparison between the two phones other than just listing features. Wait a few weeks until the Pre has been out on the street and in the hands of users. I have yet to try one, to heft it and try the keyboard, so I will withhold my judgement until then.

The Sprint network? I had Sprint for years and found it to be reliable network. Of course that depends on where you are, but only in a few rural areas and while on county roads did I not have a signal.

[willhoyt_dotmac]

You seem to have confused "cost" and "value." It's possible to save on the monthly service plans with the Pre if you are into instant messaging (lower cost) but the Pre has very few applications and a lousy carrier (lower value). For all those things I like to do on the iPhone, with the Pre there ISN'T "an app for that."

[solu1978]

iPhone has the best carrier ? AT&T ??

[pithenumber]

Sprint>AT&T
ATT is what stopped many people from getting an iPhone

[CDubber]

Don't forget all the money you'll save on apps that you won't be able to buy for the Pre. :)

Oh, and FYI, monkeyfun14 is a known Microsoft troll around here. Listening to him foam at the mouth with Apple hatred can be quite amusing.

[Seaspray0]

I think it's more hatred towards the apple trolls than the products... and the sarchasism in his first post was amusing. If you two were actually honest with each other, rather than flame, you might be surprised at well even people with different likes/dislikes can get along.

[monkeyfun14]

@Seaspray

Your absolutely correct.

I have no beef with Apple I actually buy their products I just dislike a good portion of the users.

[AppleSuxLeo]

Walt Mossberg , David Pogue and all the other tech heavyweights say it is FANTASTIC !
And so is the stock ;)

[Perry_Clease]

I watched Walt's review and I didn't catch where he said it was "fantastic." He did say that a "worthy competitor." Here go watch the video for yourself http://ptech.allthingsd.com/20090603/palms-new-pre-takes-on-iphone/

Now if David said it was "fantastic" give us a link to the statement.

[Lucknowlars]

I think if you look carefully Mossberg declares the Pre a nice competition for the 3G. He refers obliquely to the fact that he knows more about the upcoming iPhone than he can say publicly and that said upgrade will surely change the equation. Perhaps Palm should work on time-travel tech to transport their stock of Pres to June 2008?

[DrtyDogg]

Mossberg is a paid Apple shill

[AppleSuxLeo]

Epic Fail...that is why Verizon and ATT are getting it so soon. And why Walt (Apple-Lover) Mossberg likes the Pre.

[orangeneptune]

I think it's important to point out that "price" is very different from "value". Value would be what the product brings into your life that wasn't there before and can sometimes be hard to quantify.

Just sayin'.

[iroq321]

let's look at the facts. the pre is a great device, specially at launch. imagine with a couple of updates if a minor bug or two are present, it will be eve better.
it is also less espensive to own. sounds like a win-win situation to me.
i can't speak for the network although neither AT&T or Sprint are as good as Verizon.
Pre it is!

[Vechs]

Sprint and Verizon use the same towers... and in all sincerity all the pre has to do to truely surpass the iphone is be a reliable and complete platform, numerous updates to the os have still not made the iphone a complete smartphone-esque platform, or take away from its unnervingly high defective unit rate out of the box, on either version. Given that, should the Palm Pre be both reliable (their products historically are) and complete as a system, all one has to do is drop the fruit and pickup a phone.

[kaibelf]

This article fails to take into account a few things:

1. How many people will utilize AND actually receive their rebates? They have a way of "not coming."

2. What about the iPhone update which is almost certainly going to be announced in about a week?

3. If you can't handle the software keyboard, the undersized Pre keyboard will hardly be a relief. Every review says it's VERY small.

[DrtyDogg]

rebate is instant at best buy and radio shack. A rumors said from sprint to, though I'm not sure how that rumor panned out.

[Seaspray0]

@drtydogg. I hope it is. kaibelf is right about rebates having a way of not comming.

[Squashman2]

Keyboard looks bigger than the Centro, so I will be happy to have it.

[F1Turbo]

One other difference with the plans--AT&T has rollover minutes, Sprint does not.

[Perry_Clease]

Yes, and I have accrued a lot of them. When I was on Sprint I had the plan where if I went over my minutes then I would only be charged $5 for the next 100 minutes.

[Squashman2]

Yeah, that is nice for people who really use their phone alot. My wife and I were sharing a 1400 minute plan and we weren't even using 700 minutes of that every month. We dropped down to a 900 minute plan and don't even use all of that.

Now if you accumulated a couple of months worth of minutes, it would be great if AT&T gave you a rebate for the minutes you didn't use!

[Grigsby_51]

Do any of you guys realize how ridiculous the discussion of a $100 or $150 per month plan sounds to most of us? These overpriced gadgets and plans are an insane waste of capital.

[Synthmeister]

I don't have an iPhone but would love to get one. (iPod touch instead) That said, AT&T's rate plans are ridiculous. Why not let someone buy an iPhone with a standard rate plan, no data and no texting? I'll use wifi for those jobs, thank you very much.
Anyways, rumor has it that because of increased competition AT&T is mulling over cheaper rate plans. If Pre accomplishes that, I'll be a happy camper. However, a lower rate plan, combined with a 32GB iPhone could make the Pre suddenly look very dated with its 8GB limit.
Otherwise, I think Pre will succeed by cannibalizing other Sprint smart phone sales. I don't think it will attract a lot of outside customers for Sprint especially because rumors are already saying that Verizon will get its own Pre in six months. Not a smart advertisement for Sprint if it wants to use the Pre to attract switchers!

The problem for Palm, Microsoft, Nokia, Sony and everybody except RIM, is that in less than two years, Apple has turned the iPhone/iPod touch platform into an absolute cash cow. Apple is racking in over $4 billion per year in revenue from it's iPhone division, has 40 million users (with the touch) and the App store explosion is just beginning. Apple also has $28 billion in cash for engineers, R & D, outside acquisitions, etc. not to mention the best marketing in the world. Apple is also diversified, still bringing in gobs of cash from it's Mac division, iPod division and iTMS.

Palm, however is a one trick pony and that trick better work pretty quickly. I wish they would have come out with the Pre a year ago instead of wasting time, money and manpower with BeOS and Folio.

[Dan7637]

the palm pre is garbage, iPhone offers better value with its superior interface, app store, apple support

plus why trust a company that gave up on its own os to use win mobile

[monkeyfun14]

Well Apple gave up on powerpc so they could run Windows.

[Perry_Clease]

"by monkeyfun14 June 4, 2009 4:40 PM PDT
Well Apple gave up on powerpc so they could run Windows."

Wrong!

[Seaspray0]

@dan7673. "the palm pre is garbage." And you know this how, when they aren't even available yet? You certainly haven't tried one. There's a name for people who make choices based on no information or reason: idiots.

[Squashman2]

They had to upgrade the OS at some point. Just like Apple did with OS X.
They had actually sold off the OS to another company a few years back.
So it was just a matter of time for them to create a new OS.
They got the right people in place to accomplish that task and they did a good job.
Its functionality already exceeds the iPhone and the Apps will be plentiful. Just give it time. They didn't release the SDK until the beginning of April.

[Grigsby_51]

How about a free latte with an "app"? Do you wear socks?

[ralfthedog]

1. I can't picture my self using a phone that waists space on a hardware keyboard. Use the space for the screen.

2. I can't picture my self developing applications for any mobile devices other than the iPhone and the Touch. Apple provides great support and the market is just to good (If you make a good application it is hard not to make money). With Apples probable plans to extend the iPhone market to tablets and other devices, the code and artwork you produce for the iPhone can easily be extended to other markets.

The Pre will be a good device for people on a budget. I don't see it as a market killing device.

[DrtyDogg]

Good luck with that.

[ballmerisanape]

Your comparing a phone that hasn't been released yet to one that is a year old... and due to get a significant hardware and software upgrade. How about we tell this story in a month or two..

[DrtyDogg]

in a month or 2 when the iPhone 3 is released, palm will be ready to release another phone, so should we wait again there too? FYI there is always something better on the horizon.

[F1Turbo]

Don't count on Palm releasing another new phone that quickly. The Pre has been YEARS in the making. I've been through the Treo 300, 650, and 700, and got tired of waiting for a significant improvement, which is finally arriving now with the Pre. It took Palm 6 months to get the phone to market after it's official announcement.

[cdxskier6]

Palm made a big mistake by letting Spring carry the Pre. It's a dealbreaker for me.