Both the Palm Pre and Apple iPhone 3G S can put most of their competitors to shame. However, when stacked next to each other, the iPhone 3G S sports just enough extra capabilities to give Apple the lead over the Pre. Among them are the ability to natively record and edit video, geotag video, guide you via its digital compass, and remotely wipe your phone's contacts and drive if lost. (The last feature requires a $99/yr. MobileMe account.) It can also make international calls via AT&T's GSM network. In addition, the iPhone 3G S is compatible with over 50,000 apps from the Apple iTunes Store. With only 18 apps to its name, the Pre has the insurmountable task of catching up to Apple, a feat that even Google's Android hasn't achieved. (For a detailed look at the Palm Pre's capabilities, check out our previous Palm Pre feature here.)
Winner: iPhone 3GS
If you're looking to keep your monthly cell phone bills low, Sprint is the clear winner. For $70/month you'll get 450 anytime minutes and unlimited data usage including unlimited picture and text messaging. Meanwhile, AT&T customers can expect to pay a premium for the right to own an iPhone. To begin, AT&T requires a $30/month data plan. Next, you'll need a voice plan of which the cheapest is $40/month for 450 minutes. Unlimited text messaging adds $20/month, which brings the monthly total to $90. In two years, you'll spend $1,680 on Sprint versus $2,160 on AT&T, not including the price of each phone.
Customer price gouging
Unfortunately, if you're a current AT&T or Sprint customer, your upgrade options are both expensive and confusing. Current AT&T/iPhone 3G owners will be able to purchase the iPhone 3G S at the announced price only after fulfilling an 18-month requirement with AT&T. However, certain customers might qualify for an "early upgrade price" in which you'll pay $399 for the 16GB 3G S and $499 for the 32GB 3G S. If you don't want the two-year contract, you'll need to pay the full price, which is $599 for the 16GB 3G S, $699 for the 32GB 3G S, and $299 for the 3G model. Likewise, Sprint will charge its current customers $299 or $375 for the Palm Pre depending on how long customers have been with Sprint. In other words, if you're a current AT&T or Sprint customer you're better off waiting until you qualify for a discount or staying with the phone you have now. Unfortunately, these price hikes are common amongst all wireless carriers and not just Sprint and AT&T. We recommend contacting AT&T and Sprint directly to find out your upgrade options.
Winner: Verizon & T-Mobile customers
At $99, the iPhone 3G is among the most affordable smartphones you can buy. However, don't be mislead by its price drop. AT&T is still more expensive than Sprint and after a two-year contract the Palm Pre is significantly cheaper ($380 less) than the iPhone 3G.
Winner: Palm Pre
On paper, the Pre's features and affordability appear to all but destroy AT&T and its pricey iPhone alternatives. However, the iPhone and its OS have had two years to evolve and despite a few flaws (no MMS support till end of summer, no expandability). Additionally, new iPhone 3.0 software (a free update due for release on June 19) looks likely to raise the bar yet again for the entire smartphone industry. As a result, the iPhone remains the undisputed champ of the smartphone market.
Value-wise, you'll save some money with the $99 iPhone 3G. It'll lack some of the iPhone 3GS' new features such as video recording, the built-in compass, and longer battery life over Wi-Fi, but the iPhone 3G will receive the same (free) iPhone 3.0 software update as its bigger brother and it will run the same apps as the iPhone 3GS. Sure, AT&T will make you spend more money on a yearly basis, but you'll avoid the first-generation bugs bound to show up on the Pre and enjoy a smartphone who's had two years to mature.
Winner: iPhone 3G
Click ahead for a breakdown of each phone's specs and pricing.