The Palm ( PALM) Pixi, the diminutive follow up to the Pre, hit stores last week priced at $100 with a Sprint contract. However, Sprint quickly started the discounts to stem the flow of subscribers from its service. The numbers. Amazon is now selling the Palm Pixi for $25, a quarter of the price it went for when it was introduced Nov. 15. Falling prices on new smartphone models suggest demand may not be strong. The stock. Palm's Pixi was designed to compete with the $99 Apple 2G iPhone and lower cost BlackBerries from Research In Motion ( RIMM). Investors have been concerned the Pixi could cannibalize Pre sales. The timing of Pixi's arrival also puts it up against Motorola's ( MOT) Droid at Verizon ( VZ). Palm investors, who cheered the company's revival, are now looking at a very crowded market.