Staggering, considering the Pixi arrived at market just four days ago, but perhaps necessary given early and widespread complaints about the device’s slow operating speed, some unfavorable reviews and the fact that the Pre–the Pixi’s more robust elder sibling–is now selling for $99.99 and $79.99 at Wal-Mart (WMT) and Amazon (AMZN), respectively.

UPDATE:

Palm’s aren’t the only smartphones being heavily discounted as we head into the holidays. Motorola’s and HTC’s are as well. Amazon is offering the Moto’s Droid for $149.99 and Overstock is peddling the HTC Eris for $49.99.

• Orphan works–books whose copyright holders are unknown–will be overseen by an independent trustee who will administer their licensing, not by Google.
• Books published outside the United States, United Kingdom, Canada and Australia will be excluded from the settlement.

Those are substantive alterations, but they clearly haven’t placated critics who accuse Google (GOOG) of attempting an “end-run around copyright law as we know it.”

The Open Book Alliance–a coalition whose members include the Internet Archive, Amazon (AMZN), Microsoft (MSFT) and Yahoo (YHOO)–has blasted the revision twice already, decrying it as “a sleight of hand” intended to distract people from Google’s continued efforts to establish a monopoly over digital content access and distribution.

“The proposed changes fail to address this deal’s fundamental flaws,” Open Book Alliance Co-Chair Gary Reback said in a vitriolic statement. “Despite Google’s effort to spin this deal, it does nothing to promote competition nor does it reform Google’s exclusive access and monopoly hold on this digital database of books. Their proposed ‘unclaimed works fiduciary’ will have zero authority to promote competition or expand access. It is a cynical diversion away from the parties’ continued reliance on the discredited argument that competitors can obtain access through the very means Google did–getting sued for copyright infringement and abusing the class action process. This deal remains rife with anti-trust, class action and copyright violations.”

Earlier this week, analysts at Citigroup (C) and CL King voiced their concerns about the company in the wake of another ugly quarter from carrier partner Sprint (S). Now Standard & Poor’s is doing so as well. In a note to investors today, analyst James Moorman whacked down his price target on the company’s shares to $10 from $12 and reiterated his “Strong Sell rating.

“We believe the upcoming holiday selling season will be very competitive for handset vendors and think Palm could see competitive pressures,” he wrote. “We believe the small price difference between the Pre handset (especially when on sale at third party vendors) and the new lower-end Pixie could limit Pixie sales and confuse consumers during the launch.”
 
Indeed. As I noted here last week the $99 price Sprint has set for the Pixi is identical to the Pre’s on Amazon (AMZN). And the Pre has a faster processor, a better screen, and Wi-Fi support as well.

Not the most desirable circumstances for heading into the holiday season.

Which is saying something. Because as you might recall, in 1999, Nasdaq was soaring on the back of the dot-com bubble to levels never before seen.

And here we are amid the worst recession since the 1930s. Haven’t even entered that “all important holiday shopping season” yet, either.

Things are looking pretty good for Amazon (AMZN) right now. Sure, there’s renewed competition from retailers like Wal-Mart (WMT). There are potential sales tax issues and income tax liabilities and a raft of Kindle-killers headed to market. But Amazon’s stock is up 131 percent this year, brokerage firms are upgrading their ratings on the company, and analysts are saying it’s only going to go higher.

Said Citigroup analyst Mark Mahaney: “Near-term outlook very positive as AMZN heads into holiday season fully armed against shrinking/de-stocking offline retailers, with one of the must-have gadgets of the season (Kindle), a significantly strengthening International presence, and soon-to-be closed Zappos acquisition.”

Yeah. Things are looking pretty good right now. But we said that back in ‘99 too–when Amazon had a similar P/E.

“We’re eagerly awaiting Apple’s Tablet and the answer to the question of whether there really is a very large market for stand-alone eReaders. We think there is…we see people carrying around stand-alone Readers all the time…they’re called books.”

– Mark Mahaney, Citi Investment Research

“It appears that Amazon is gaining share the old-fashioned way,” ThinkEquity analyst Ed Weller noted last week, “by acquiring more and more customers…and selling more to each of them.” And judging from the nice gain in third-quarter earnings the company posted after Thursday’s closing bell, that would seem to be the case.

Net income for the period surged 69 percent thanks to a strong increase in sales. Analysts had been looking for earnings of 33 cents a share on revenue of $5.02 billion for the quarter. Amazon (AMZN) reported 45 cents a share, compared with 27 cents a share for the same period the previous year. Revenue rose 28 percent to $5.45 billion.

Once again, it seems Amazon has not broken out Kindle sales numbers in its report, though CEO Jeff Bezos did stress them in an earnings release. Said Bezos: “Kindle has become the #1 bestselling item by both unit sales and dollars–not just in our electronics store but across all product categories on Amazon.com. It’s also the most wished for and the most gifted. We are grateful for and energized by this customer response.”

Looking ahead to the key fourth quarter, Amazon is calling for revenue in the range of $8.125 billion to $9.125 billion. Analysts have been forecasting revenue of $8.13 billion. Given that the upcoming quarter includes the annual holiday shopping binge, Amazon may be looking at another blowout quarter.

Shares in the company are spiking on the news, up over nine percent to $101.90 as I write this.

“The launch of Windows 7 has exceeded everyone’s expectations, storming ahead of Harry Potter and the Deathly Hallows as the biggest grossing pre-order product of all time at Amazon.co.uk,” Amazon’s Brian McBride told the Telegraph. “Demand is still going strong. Over the past three months, only Dan Brown’s The Lost Symbol has sold more copies than Windows 7, which is an incredible achievement for a software product.”

And an incredible achievement for Microsoft (MSFT), especially after that monument to disappointment, Windows Vista. Seems those early discounts and launch parties paid off. Well, maybe not the launch parties.

“Apple continues to execute well across its major product categories,” McCourt wrote in a note to clients today. “…we believe trends are faring better than expected, with a notable increase in Mac demand following the release of Snow Leopard in early September. We believe this reflects the improved value proposition of the MacBook Pro line (updated last June with new price points), which have been performing particularly well on both Amazon and Best Buy’s top sellers charts, two web sites that we believe provide a decent proxy for sell-through trends in the U.S. consumer PC market.” (See chart below; click to enlarge.)

Given this, McCourt expects Apple to exceed consensus estimates and its own guidance–a safe bet since the company’s been doing this for a while now.

This morning, the research and development company filed suit against nearly two dozen companies, accusing them of violating two of its patents–U.S. Patent No. 5,838,906, the same one Microsoft allegedly ran afoul of, and No. 7,599,985, an extension of the 906 patent that covers embedded apps using AJAX. Among the companies named in the suit: Adobe (ADBE), Amazon (AMZN), Apple (AAPL), eBay (EBAY), Google (GOOG)–including YouTube–Sun (JAVA) and Yahoo (YHOO).

“All we want is what’s fair,” Eolas Chairman Dr. Michael Doyle said in a statement. “We developed these technologies over 15 years ago and demonstrated them widely, years before the marketplace had heard of interactive applications embedded in Web pages tapping into powerful remote resources. Profiting from someone else’s innovation without payment is fundamentally unfair.”

Sadly, “what’s fair” in this case threatens the very fabric of the Web, as Tim Berners-Lee, the computer scientist credited with inventing the World Wide Web argued back in 2003 when Eolas was pursuing Microsoft (MSFT). “The ’906 patent will cause cascades of incompatibility to ripple through the Web,” Berners-Lee said in an appeal to the U.S. Patent and Trademark Office. “[It] is a substantial setback for global interoperability and the success of the open Web.”

If the medium was the message in yesterday’s zeitgeist, today’s “message transcends the medium” is a whole new mindset. It’s a brave new world out there, and AllthingsD didn’t fail to help make sense of it this week.

Boomtown was abuzz with the latest conversation from an Internet publishing sensation. Trip Adler, CEO of San Francisco-based Scribd, spoke to Kara about all things text and what its like to share a niche with giants. Speaking of giants, Boomtown was in Seattle this week, peering through everyone’s favorite Windows. While there, Kara caught wind of CEO Steve Ballmer’s embrace of the “new efficiency” by way of some executive belt-tightening. And in a followup to the near-viral “Louie Swisher loves Redbox” video, Kara wrote about a legal slap-fight between the DVD rental kiosk group and Fox.

While Fox was busy giving Redbox a black-eye, Digital Daily covered blows from a different kind of palm. It seems that Palm’s new mobile darling, the Pre, is a little over-abundant on store shelves. An 11 week-deep glut of the device may indicate tough times ahead for the smart-phone contender. If one plucky contender wasn’t enough, Digital Daily also covered IBM’s release of a LotusLive iNotes. This mail, calendar, and task management solution takes aim at a market currently in Google’s crosshairs. Finally, the week wouldn’t be complete with out a good Apple prognostication. John closed things out with some FCC documents that indicate a new wireless mouse and keyboard offering from the crew at 1 Infinite Loop. The logical jump is that the new input devices might be designed to complement a newly refreshed line of desktops.

John had new Macs and Peter had old tricks this week, specifically of the Kindle kind. In a settlement with the now-famous “1984 kid,” Amazon sealed up some of the holes in its policies about removing books from its Kindle devices. Now it’s most certainly against their policy to remove data…except when it isn’t. In a similar vein, more details surfaced about an upcoming e-publishing venture from Time that aims to put the content genie back in the bottle, Hulu style. The concept is to create a clearinghouse for magazines online and take back control of content and advertising dollars. Just in case we were beginning to think that there is always digital strength in numbers, Peter covered Comcast’s squashing of a rumor that it was looking to acquire a stake in NBC. Just the hint of such a move sent Comcast’s stock on a temporary tumble.

Walt was a personal technology machine this week with new additions to both the personal technology section and Mossberg’s Mailbox. And if that weren’t enough, Katie covered an important countertrend in personal tech that really turned some heads.

The personal tech feature of the week was the HTC Hero. This latest offering from the veteran Taiwan phone manufacturer features its most robust customization of the Android platform yet. Walt gave it high marks and placed it squarely among the Blackberry-Palm-Apple pantheon.

Walt checked the mailbox this week and answered some serious questions about the rise of the touchscreen laptop, the finer points of OS X and the iPhone OS, and tried to let a Vista Ultimate user down easy about the limited options for an easy upgrade to Windows 7.

Katie brought her A game to The Mossberg Solution with a succinct and poignant analysis of HP’s new growth model. The new Photosmart All-in-One with “Touch-Smart Web” bucks the current trend of photos and documents for digital display and tried to put consumers back in the printing game. The new printing experience uses a robust touchscreen and Web interface to allow printing of pics straight from the Web without a computer ever being involved. While she did have some good things to say about the printer’s apps and interface, HP’s overall strategy left her underwhelmed.

Whether you want to be the first to know when “that tablet” finally arrives or are just into the best coverage from the industry that is changing the world, there is no better homepage for all-things-tech than AllthingsD.

Notably absent from this update, however, is the reenabling of iTunes synchronization, which Apple (AAPL) spannered when it released iTunes 9.0 earlier this month. Seems that Palm (PALM) was either unable to develop a way to restore this feature or has thought better of doing so after the USB Implementers Forum took issue with the manner in which it was doing it.

“The sole driver of the increase in Apple’s price target is a higher valuation of the iPhone,” Wolf wrote. “Courtesy of network effects, the explosive growth of the iTunes App Store…should translate into a higher growth trajectory of iPhone sales going forward….By exploiting a commanding lead in the all-important smartphone applications market, the iPhone is in a position to chalk up share gains in this fast-growing market that could surprise everyone….In many respects, Apple and Amazon are in similar positions. Amazon holds a relatively small but growing share of the e-commerce market, which itself is small, but growing an order of magnitude faster than the physical retail market.”

Wolf admits that his latest forecast is “judgmental” in that it’s based on the premise that software, namely iPhone applications, will drive hardware, namely iPhone sales. But he explains that the premise does have a proven track record in markets characterized by increasing returns and network effects.

“We have upped the number of iPhones that will be sold in 2018, the final year in our model, from 67 million to 107 million,” Wolf added. “Our forecast has the phone capturing 20 percent share of the smartphone market in that year, up from 12.5 percent recently. We should note that the iPhone’s share of the worldwide market is already around 12.5 percent. So our forecast is by no means an aggressive one.”

No doubt about it, it’s a good time to be an Apple investor.