TechCrunch is reporting that Palm is already creating a second WebOS device, code named Pixie, that will be a “low end” version of its upcoming (and as-yet unreleased) Pre.

From the post:

The Pixie will use the same WebOS operating system and software as the Palm Pre, but in a smaller candy-bar form factor and a target $99 price point, say our sources. It will be released only a few months after the Pre in June, so this isn’t an upgrade device. It’s targeted at the lower end of the market.

I’m sorry, but this is all sorts of stupid.

For one, prove the concept first. Get the software out there, see what the initial responses are, and refine a bit. See if it sells. See what is and isn’t not working just right; it’s entirely possible a fundamental design decision of the hardware somehow needs to be reconsidered based in this information. Then — with some market reaction data in hand — think about a different flavor of hardware that could at least have the benefit of being informed by response to the initial model.

Secondly, they’re launching a new platform which will have to court developers into its fold with two different screen sizes. Developers interested in targeting both will therefore have a two-device testing matrix out of the gates. Some will go for the full-size features of the Pre, and others will target the Pixie.

Finally, but most importantly, they’re going to fracture consumer interest. Bringing two similar products to market like this will force prospective consumers to ask themselves which one they want, and whether they “really need” whatever’s in the “big” one. In these times, more consumers are likely to steer in an economical direction, given what may well be a relatively equal set of choices, and since Palm would presumably use lower-powered hardware for the Pixie, the general consumer experience will likely feel more constrained.

I’m scared to death that Palm is killing the most promising new smartphone announced in a little over two years, before the poor thing has even come into the market.

There seems to be some question as to whether the project is completely green-lit, as Arrington mentions:

One source says it’s full steam ahead. Another says Palm is waiting to see how the Pre does before announcing the Pixie.

But, frankly, letting the information leak out like this (and at least having someone think this effort is “full steam ahead”) is enough to every bit as much harm as the actual release of the product; the anticipators will begin to demand its release, and start to play a wait-and-see, betting that Palm eventually will drop the Pixie.

And the pundits will buzz about it, and Palm will see weak sales on its Pre, and cave into the expectation of the Pixie’s release.

As I’d previously said: as die-hard an iPhone fan as I indeed am, I have been [cref 142 keenly looking forward to the Pre], both as a product of wonder and accomplishment, and as some great and much-needed competition for the iPhone, which will only make my favorite phone better, in the long-run.

Palm: good luck.

30 Apr @ 14:34: Let me add that this, of course, is merely rumor at this time; Palm has not officially announced anything. That said, TechCrunch has another post claiming to have dug up even more details. I would note that the claimed “shaky” photo of the Pixie in my original link above differs significantly in proportion from what is shown on the photo in this latest post.