Palm Inc. introduced a smartphone with a new brand aimed at a younger audience on Thursday.

The Centro phone will cost US$99.99 and initially be available exclusively from Sprint Nextel Corp. starting in mid-October.

Palm designed the phone to be cheap, small and simple to use in an effort to expand the smartphone market, said Ed Colligan, Palm’s president and CEO, during a webcast news conference at the DigitalLife conference in New York City.

In the U.S. this year, he expects that of the 160 million phones sold, just 8 million will be smartphones. The mass market isn’t buying smartphones today because they’re big, complex, have clunky designs and are expensive, he said.

“This is not an iPhone killer,” Colligan said. The iPhone, with its high price tag, appeals to the relatively small existing smartphone market, while Palm is aiming the Centro at the larger feature-phone segment.

The Centro should attract people who traditionally would buy a basic feature phone but now want the second generation, he said. “It’s small enough that it competes with the standard feature phone and it gives the full power of essentially a Treo,” he said.

College students, young professionals and “CEOs of households” are the types of people Palm designed the Centro for, he said.

The phone runs the Palm OS and operates on Sprint’s 3G network. It features a touch screen and a full keyboard and comes loaded with instant messaging applications from Yahoo, AOL and Windows Messenger. It also includes push e-mail from corporate Microsoft Exchange servers.

While sales of Palm’s Treo smartphone line have been strong, the company continues to struggle to record profit gains. It faces stiff competition from the entrenched BlackBerry, other Windows Mobile smartphones and new entrants like the iPhone.

Palm recently stumbled by announcing a smartphone companion device, the Foleo, and then deciding to kill the product just before it was due to ship after much industry criticism of the concept. Palm said it plans to resurrect the product in the future.

Palm is developing a new operating system that it expects to unveil next year. It currently sells phones based on its existing software as well as Windows Mobile.

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