SUNNYVALE, Calif. (

TheStreet

) -- How weak are

Palm

(PALM)

Pre sales? Well, Sprint's cutting the price in half to $99 is probably not a good sign.

The promising touchscreen smartphone from Palm debuted in June to a great deal of anticipation and some spotty sellouts. But with a weak partner in No. 3 telco and with the stiff competition from

Apple's

(AAPL) - Get Report

iPhone, the Pre has faded in popularity.

Sprint's monthlong $100 rebate offer requires that new customers sign on for two-year contracts, and the payback will show up as credits in the first three monthly bills.

Palm is expected to make the Pre available to other carriers, including

Verizon

(VZ) - Get Report

and possibly

AT&T

(T) - Get Report

, next year. The steep price cut by Sprint suggests that it needs to win as many new customers as it can before the exclusive sales contract expires.

Sprint shares fell 2% in mid-afternoon trading Tuesday on news of the price cut.

Written by Scott Moritz in New York

.