That means (again, assuming you can find an upgrade card) you can be at Palm III capability for a little over $200. Now admittedly, at that point, you might say "Well, why didn't you just go get a Palm III to begin with?" But it's the entry point that concerns me here. It's the fact that for the measly price of $149 you can be up and running with your own Palm device -- and for another $79, if you turn out to be a real enthusiast, you can upgrade. That's pretty amazing. That's where I see a really significant amount of opportunity.

Now, there are some issues and concerns. Obviously the PalmPilot form factor isn't being made anymore in the sense that the new molds and designs are more for the tapered Palm III look than for the rectangular PalmPilot look. Some of the new accessories being made for the Palm devices may not be compatible with the older models, although many of them still are. Of course, there's also the Palm V form factor which is just very cute, if much more expensive.

The thing is that when manufacturers want to phase out a product, they tend to drop the price of the older product to flood it out of inventory, to get it out of distribution, and to basically get it out of their system. That's probably what we're seeing now with the PalmPilot Professional. We're probably seeing a product whose price has been dropped down to $149 to clear it from inventory. That's all well and good.

However, I think that we're also seeing a very magical price point. Granted, the price point of $99 is a bit more magical. But, nonetheless, $149 is an accessible price point for pretty much anyone who needs to keep his or her act together. So, what I'm hoping is that we're not going to see the PalmPilot Professional offered at $149 for the next three months and then vanish from the marketplace. Unfortunately, on Palm's product comparison page, there is no longer any mention of the PalmPilot Professional, leading me to conclude that this price may not be long for this world. I'm hoping that the $149 price point can be retained over a longer period of time--unless of course, it drops further.

This can be kind of tough for Palm to pull off. I honestly don't know the manufacturing costs that are involved in our favorite device, but I suspect that given that it's a consumer device and given that it's manufactured in volume, it is possible to build a $149 device in perpetuity. I'd certainly like to see that happen.

It doesn't have to be the most popular. It's certainly possible to say "Okay, we'll phase out the Palm III next and move that to the $149 price." Then, two or three years from now, as even snazzier Palm computers become available, phase out the Palm V and make that available at $149. But the key is (and this is the core of what's important), I think it would be incredibly valuable to Palm's market share to retain a $149 price point for as long as possible. I think that if there's any key element to building market share (in addition, of course, to a large aftermarket base of software developers, an enthusiastic customer base, and a ZATZ journal like PalmPower) it's having an easy, low entry level price. And $149 is that magic number.

David Gewirtz is the Chairman and Editor-in-Chief of ZATZ:Pure Internet Publishing, publishers od PalmPower, DominoPower, and Windows CE Power Magazine. Ever since he put up the plaque that says his company has the "Best Sales and Marketing Strategy", he's been insufferably smug. Not only that, after twelve years of running his own businesses, he's finally got a company with it's own T-shirt.