Palm on Wednesday announced plans to release its Pixi phone on Sprint’s network in time for the holiday shopping season.

Sunnyvale, California, Palm is struggling to regain its edge in smartphones, a market now dominated by Research In Motion and Apple. But the Pixi debut and announcement that Palm’s Pre phones would see $50 price cuts didn’t bode well for at least one analyst.

“We believe the Pixi is a nice device but threatens to cannibalize Pre sales given a large number of overlapping features and the expected lower price point,” Morgan Joseph analyst James Moore wrote.

Morgan Joseph reiterated its “sell” rating on Palm shares.

Investors pushed Palm shares lower $1.23, or 8 percent, at $13.75 in trading.

Palm’s new phone boasts its webOS operating system and features a 2.6-inch touch screen and keyboard. The device will pack 8GB of storage. The company said pricing on the new phone will be released closer to the date it becomes available, also unknown. The handheld maker said its Pre will be $149 after rebates and with a two-year service contract.