Three of this year's high-profile smartphone launches have coincided in the past few weeks. The Nokia N97, the Palm Pre and two new Apple iPhones are fighting over a similar segment of the smartphone market at the same time. Pricing is key in deciding which device succeeds, as is the level of support each attracts from mobile operators in the US and Europe.

Vendors are scrambling for attention from users in a crowded market: The N97 launched in the US at the start of this month, followed on June 6 by the Palm Pre. The two Apple iPhone 3G S handsets were launched in the US and UK on June 19, coinciding with the UK launch of the N97, which is set to become more widely available across Europe in July.

The prospects of the three devices neatly summarize the three vendors' relationships with mobile operators. Apple maintains a powerful position with operators everywhere, Nokia continues to struggle in the US though is generally strong in Europe, and Palm is in the early days of a fight to show operators that it can regain the aura its devices used to have.

Mobile operators can afford to be choosy about which smartphones they subsidize, since the number of models has multiplied. The leading contenders have similar specifications.

Nokia failed to find an operator to sell the N97 in the US and is offering the device without a subsidy at a cost of US$700, which makes it uncompetitive with rivals. The 32GB Apple iPhone 3G S costs less than half as much, thanks to the subsidy offered by AT&T Wireless.

It's interesting to note that the unsubsidized (SIM-free) price of the 32GB Apple iPhone 3G S is identical to the N97's, implying that if Nokia had found an operator, its pricing would have been competitive with Apple's.

Nokia has historically struggled in its relations with US operators and done better in Europe. In the UK, for instance, its handset is slated to be released by Vodafone, and probably at least one other operator, in July. The handset initially went on sale June 18 in Nokia's own UK stores.

The situation in the UK for Nokia is the opposite of what it faces in the US. Instead of being uncompetitive with the 32GB Apple device, the N97 offers much better value in the UK). It is available free for users who sign up to a two-year contract with Vodafone. In contrast, the Apple device, depending on the package, costs at least £97 and as much as £274. And the two-year contract with Vodafone is better value than the package from O2, iPhone's exclusive UK partner.

Apple has maintained its exclusive relationships with AT&T Wireless in the US and O2 in the UK for the launch of the two new iPhones. It has a powerful voice in setting the end-user pricing of its devices.

The price of Apple's 8GB iPhone 3G in the US was cut in mid-June to US$99. The model was first launched in July, when it cost US$199, the same as the newly released Palm Pre.

Under pricing pressure The Pre is central to Palm's revival, as the first device based on the company's new WebOS operating system. The Pre is set to be distributed exclusively by Sprint Nextel in the US until the end of this year. Larger rivals Verizon Wireless and AT&T Wireless are interested in selling it thereafter.

Sprint Nextel must decide whether to cut the price of the Palm Pre in response to Apple's price cut this month. A reduction to match the 8GB Apple's new price would arguably maintain the momentum behind the Pre.

Sprint Nextel lost 1.2 million postpaid customers in its most recent quarter and says the Pre is a means to turn around this trend. "If Pre is the primary weapon to bring back customers, then they will lower its price," says Ping Zhao, a senior analyst with CreditSights, a US credit-and-equity-research firm. Sprint might decide to reduce its subscription charge as well as the Pre's price, Zhao says.

Separately, Palm can keep up its momentum by finding new operators to sell the Pre. So far it has announced only Sprint Nextel and Bell Mobility, which are set to distribute the Pre exclusively in Canada in 2H09.

Both Sprint Nextel and Bell Mobility are CDMA operators, and Palm has not developed a WCDMA model. Given the pressure to bring out other WebOS-based devices, it would make sense for Palm to launch a WCDMA version of the Pre in Europe later this year, but it has not announced a distribution agreement with any European operators.

One analyst at an investment bank, who did not wish to be named, says Palm's next move might be the launch of a new WebOS-based device in the US, though with an operator other than Sprint Nextel. "I'm fairly certain we will have one other carrier this year," he said. An agreement with an additional operator for a new Palm device would not change Sprint Nextel's exclusive deal for the Pre.

Nokia is unlikely to find as much interest in the N97, at least in the US. It is aiming for a wider distribution of the device in Europe. Even there, distribution is not set to be entirely straightforward.

Surprisingly, Telefonica O2 does not plan to sell the device through its UK stores or Web site, though users will be able to connect to the O2 network by buying the N97 from major retailer Carphone Warehouse.

One theory for the omission is that O2 has invested heavily in subsidizing the iPhone and does not want to stretch its marketing budget any further, though O2 denies this suggestion. It says its product lineup is designed to meet demand from its customers, even though the N97 is one of Nokia's flagship launches for this year and is likely to generate significant customer interest.

Some operators are also reportedly unhappy with Nokia's decision to make VoIP provider Skype available on the handset and want to see the service removed. This kind of decision usually goes over badly with users.

Apple, or rather AT&T Wireless, has received some negative feedback in the US for its treatment of users who want to upgrade from their existing models to the new iPhones. Existing users are eligible for an upgrade once they are at least one year into their two-year contract. Those who bought the old 3G iPhone shortly after launch in July - a large proportion of customers – are not eligible for the subsidized US$199 or US$299 price for the new Apple devices. Instead, existing users must pay US $399 or US$499, since they are only halfway to compensating for the US$400 subsidy on their original iPhone. UK users have similarly complained about O2's upgrade price for the device. Since operators hold the power to subsidize new devices, they are often the first to attract criticism from users about pricing policies.