O2 Lands Palm Pre

Have to say I'm a bit disappointed. One of my hopes for the Palm Pre was that in order to eat into the iPhone market they would be offered with very competitive tariff deals. Now that they are on O2 it looks like that might be less likely.
Unless of course they are in the process of losing the iPhone deal...

Hmmmm, i don't quite know what to make of this one to be honest...

If o2 are about to lose the iPhone, then trying to replace it with the Pre is a step in a different direction to me. iPhone is generally a more 'youthful' brand than Palm is to my knowledge, and unless o2 are going to spend gadjungas of money assisting palm in rebranding their image, then replacing one with the other ain't gonna be THAT lucrative.

However, if thyey're seeing the potential to corner the business-user/uuber-geek market as more lucrative than the iphone market, then they may be onto something. They'd be the only uk telco with something that challenges iPhone on the flashy bits and also satisfies others with its techno gizmos and blackberry-challenging keyboard.

if they're not losing the iphone, they'd have cornered the market by getting arguably the two best touch-screen handsets on the market; one catering for the fashionable and hip, and the other catering for the more discerning/power user market.

On a slightly different tangent, telcos are now looking to rinse the handset price scenario dry since Europe and OfCom came hand in hand to take from their call charge pockets.

Bottom line is this: if you've got shareholders who demand more each year, and you can't make more on call charges, make more on handsets/handset deals. Nothing personal guys - it's just business...

@ThaDon
Perhaps there is a further scenario where, in order to keep the iPhone on their books, O2 will use their deal with the Pre to reassure Apple that the two products will be pushed at different markets a la your third example.
Thus staying with O2 becomes a more attractive option for Apple for keeping the iPhone market share intact.
Because, as you say, the Pre could challenge the iPhone on the flashy bits and, if it proves to be as good as early impressions, could generate a whole new legion of dedicated palm users as they did in the past and as Apple have more recently.

@Chilliboom
I'd defo go with that, as long as Palm doesn't mind the Pre being marketed as an 'alternative lifestyle' product to iPhone.. Considering the state of their books at the moment i'd have thought they'd be gunning for the top wrung...?