Seems that in the end, Palm (PALM) decided it would be folly not to match the $199 price of Apple’s (AAPL) iPhone, though according to CEO Ed Colligan, the Pre is far superior to it. Asked at the Consumer Electronics Show if Palm would try to take market share by undercutting the iPhone on price, Colligan told MediaMemo’s Peter Kafka, “Why would we do that when we have a significantly better product?”

Perhaps, because you must? As J.P. Morgan analyst Paul Coster noted this morning, “The $199 price point was absolutely necessary, in our view, to go head to head with RIM and Apple.”

Interestingly, this means the Pre will indeed ship just days before Apple’s Worldwide Developers Conference, the event at which the company is expected to announce its next-generation iPhone. Which suggests that perhaps, as I theorized yesterday, Palm is hoping the Pre will benefit from the iPhone halo. “By debuting so close to the presumed announcement of the iPhone, Palm would be ensuring that its new device is fresh in the minds of anyone mulling the purchase of Apple’s latest offering–or writing about it,” I wrote. “It would be parasitically riding on the back on the Apple media juggernaut. Question is, can it hang on without getting trampled?”

“…We believe Apple will focus on the new version of Mac OS X, Snow Leopard at WWDC,” Munster writes. “While some investors may be expecting Apple to launch redesigned iPhones at WWDC, we do not anticipate the launch in early June. Rather, we expect Apple to host a special event in late June or early July to launch a family of iPhones. We continue to expect multiple models, possibly a high-end iPhone with improved specs from the current version and a low-end version with lower capacity and fewer features along with a reduced pricing plan. Such a model could also be used in Apple’s launch of the iPhone into China as soon as the end of summer ’09.”

Munster’s is an … ahem … interesting theory. But remember, now that it has withdrawn from Macworld, WWDC is Apple’s biggest event of the year. Surely it wouldn’t pass up the opportunity to debut the latest iPhone there–especially when Palm (PALM) is expected to announce its new Pre handset on June 5, just three days before the WWDC keynote. And if the latest update of the device is as modest as some reports claim, there’s no need for Jobs to be on hand to announce it. It’s not a milestone product, and Schiller could easily handle it. Then the company could plan the late June/early July event to which Munster refers around that media tablet Apple’s rumored to be developing–with Jobs presiding, of course.

UPDATE: Over at Daring Fireball, John Gruber notes that if the next generation iPhone includes updated hardware, Apple will almost certainly announce it at WWDC. Why? Says Gruber, “…If there are any new hardware features — like say a video camera or magnetometer — that means new APIs, and if Apple wants to have WWDC sessions for the new hardware-specific APIs, they have to announce the hardware first.”

• 600 MHz Samsung ARM processor
• 256MB system RAM
• a 3.2-megapixel camera with autofocus
• 32GB of storage
• a digital compass
• FM

These specs were submitted to a rumor site by someone who claims to have a friend inside Apple manufacturing partner Foxconn who has handled iPhone “model MB717LL 9.” As such, they should be taken with a grain of salt, if not an entire salt flat.

That said, the rumors do seem reasonable. A 600 MHz chip is a nice improvement over the a 400 MHz part in the current iPhone, as is the doubling of RAM to 256MB. FM transmission and reception capabilities have been rumored before as has the compass. What’s missing, however, is an improved battery, a better GPU–perhaps the PowerVR SGX that’s been rumored to be heading for the device, a new, more elegant housing less prone to those hairline cracks that seem to plague the current one, and–in a perfect world–an OLED display and a second front-facing camera for video conferencing. Of course if OS 3.0 proves to be even a third as robust as Apple claims, we’ll be so enamored of the device we might not notice any of those things are missing.

A few things worth noting: The document features a misspelling. Is that an honest error, a canary trap or proof that the doc is bogus? No idea. June 5 is just three days before Apple’s (AAPL) Worldwide Developers Conference kicks off, the occasion at which the company is expected to announce its next-generation iPhone.

Now, it’s doubtful Palm would debut the Pre on the same day as a big Apple event that will drown us all in a deluge of iPhone and is-Steve-Jobs-OK-or-not news and speculation. But would it launch it a couple days prior?

Could it also be the day after Palm rolls out its new Pre handset? The latest rumors suggest it is, positing June 7 as one of the release windows for the Pre and noting that the company is casting a viral video campaign slated to run through that month as well.

It’s an intriguing thought, but would Palm (PALM) really do such a thing? It seems doubtful. Certainly, debuting a handset as anxiously awaited as the Pre a day before Apple’s WWDC keynote would be a bold move that would generate no end of jawing in the tech media and beyond.

But only for about a day. Because 24 hours later all eyes and ears will shift to WWDC and they’ll be watching not just for the next iPhone but for this mysterious new tablet device we’ve been hearing about, as well and in who’s hands those devices may or may not debut. If Steve Jobs delivers the keynote and announces them, the media’s focus will be on his health, Apple’s future and these new devices. If he doesn’t, the focus will STILL be on his health, Apple’s future and these new devices.

So for Palm to launch the Pre on June 7 would be sheer lunacy. To do so would be to set itself up to have its most important product release in years washed away in a deluge of Apple (AAPL) coverage. Better to launch the device well in advance of the next iPhone’s expected arrival or after it than be subsumed in the iPhone/iTablet monomania that’s ramping up. WWDC is already sold out.

Oh, one last thing–an interesting side note. My last message to Palm’s PR head, Lynn Fox, was met with an out-of-office message explaining she’s away on vacation until May 11. Resting up for the big announcement, presumably, which–given her return date–may fall closer to the originally rumored May 17 drop date than thought.

What is interesting here, though, are 100 percent unconfirmed hints that the next-generation iPhone will support faster 3G speeds. If this is indeed the case, it suggests that the device may run Infineon’s new SGOLD3 chipset. And if it does, that means it will be capable of supporting not just download speeds twice that of current 3G networks–theoretically 7.2 Mbps–but a five-megapixel camera and real-time video encoding/decoding with a new on-board video camera. Now that would make for an exciting summer, indeed.

The event may explain as well the “future product transition” that compelled Apple to forecast a nearly 5 percent drop in gross profit margin for the final quarter of the 2008 fiscal year. Apple offered few details of that transition, though CFO Peter Oppenheimer said during a July earnings call that it will involve “state-of-the-art new products that our competitors just aren’t going to be able to match.”

“One of the investments we make is to introduce new products that initially cost more because they deliver an entirely new level of value to the customer,” Apple COO Tim Cook said during the same call. “Then we ride the cost curves down with value engineering and volume manufacturing, leaving us far ahead of our competitors. We have some of these types of investments in front of us that I can’t discuss.”

Until Tuesday, Oct. 14, that is.