According to estimates from iSuppli, a market research firm, the upcoming Palm Pre will cost its manufacturer an estimated $138 dollars per unit. This is somewhat cheaper than the production cost of an iPhone (which is around $170) and should allow Palm and Sprint to undercut Apple's price significantly.

iSuppli speculates that Palm will charge Sprint $300 dollars a unit, and that Sprint will retail sell the initial batch of Pres for $200 dollars, thanks to a $100 dollar subsidy.

Although iSuppli is a very trustworthy source for this sort of information, this report should be taken with some healthy skepticism. Palm hasn't been handing out prototypes of the Pre for testing, and so iSuppli was forced to make an estimate off of the cost of the parts used to construct the new Palm. Their number is likely very close to the mark, but probably not exactly right.

While their estimate of the unit cost is somewhat specious, I think they've got the retail price down pretty accurately. Sprint can't afford to charge much more than $200 if they want the Pre to have a shot at dethroning the iPhone, or of just establishing its own healthy niche in the smartphone world. Inexact as it is, this news should still be very exciting for Palm fans. With any luck, they'll be able to get their hands on this affordable new smartphone by June.