SAN FRANCISCO — Palm Inc., which revitalized its product line with the Pre smart phone launch in June, is hoping to keep momentum going with the release of a lighter, cheaper handset called the Pixi.

The company said Wednesday that the Pixi will be available during the holiday season through Sprint Nextel Corp., currently the Pre's exclusive wireless carrier.

Sunnyvale, Calif.-based Palm would not divulge the Pixi's price tag, but confirmed it will be less than that of its big brother. Sprint shaved $50 off the Pre's price to $150 on Wednesday, including two rebates and a two-year service contract.

"The combination of announcing a new device and changing the price on the Pre show we're aggressively pursuing new customers to get them accessing the WebOS experience," Katie Mitic, Palm's senior vice president of product marketing, said in an interview Tuesday. WebOS is the operating system powering the Pre and the Pixi.

Contrary to a promotion briefly advertised on its Web site Tuesday, Sprint is not offering customers a $100 credit to switch to the Pre from another carrier. Sprint spokeswoman Michelle Leff blamed the Web site glitch on the carrier's computer system. The company will honor the deal for new customers who bought the Pre that day, though.

The Pixi's release will mark Palm's second attempt in less than a year to use new software and streamlined designs to lure consumers in the still small but fast-growing smart phone market, which is dominated by Apple Inc.'s iPhone and Research In Motion Ltd.'s BlackBerry devices. According to market research firm NPD Group, smart phones made up 28 percent of consumer cell phone purchases in the second quarter, up 47 percent from the same period last year.

Palm hasn't disclosed the number of Pre smart phones sold. But its stock has more than quadrupled since the company unveiled the device Jan. 8 at the Consumer Electronics Show.

Source: The Associated Press