The device, intended as a replacement for the Centro, Palm’s last PalmOS smartphone, is expected to feature a 2.6-inch multitouch display, inline keyboard, two-megapixel camera and 4GB of internal storage, among other features. Word on the street has it priced at $99 with contract, rounding out the lower end of Palm’s new webOS lineup.

And when will it arrive at market? No one seems to know, though Tavis McCourt and Justin Patterson at Morgan Keegan & Company speculate that we’ll see it sometime this fall. “We believe initial Pixie shipments will begin in the November quarter, although timing is still uncertain (we believe the goal would likely be a holiday launch),” the analysts wrote in a research note today.

“Although Pixie is unlikely to be a ‘hero’ product with massive advertising and subsidy support, its $99 price point should drive substantial volumes and we believe distribution can be broader initially if not exclusive. In general, we have used the Centro as a benchmark for the Pixie. At a $99 retail price point, the Centro peaked out at about 1 million units shipped/quarter with distribution at all of Palm’s significant historic customers. We have the Pixie ramping quickly to these levels in calendar 2010 as distribution ramps.”

That seems a reasonable expectation, especially if the Pixie isn’t exclusive to a single carrier. And at present, it’s thought that the device will be available, at least initially, from both AT&T (T) and Sprint (S).

So, as McCourt and Patterson note, Palm (PALM) could be poised for some significant gains in market share. “We expect Pre shipments of 2.2 million in 2010 (May 2010) and Pixie shipments of 1.2 million,” the analysts write. “Based on our bottoms up estimate, we forecast Palm will ship just over 7 million smartphones in fiscal 2011, which would likely represent about 4 percent of smartphone share, but a more meaningful–10 percent share of its core N. America market.”

[Image credit: Engadget]

A remarkable metric, given the economic downturn. How is it that gaming is thriving at a time when the global financial crisis is squeezing wallets? “There are a couple of reasons,” Ron Meiners, director of community for the Hollywood Interactive Group, recently told News.com. “One is the traditional value of entertainment during tough economic times. Like the great fantastic musicals in the 30s. Movies did great, because they took people’s mind off of the troubles they were facing. [And] videogames have great value as entertainment. The number of hours of solid entertainment that comes from a videogame purchase is much greater than a movie, for example, for very comparable cost.”