Online retailers have slashed the prices of Palm, Inc.'s (NASDAQ: PALM) newest smart phone, the Pixi, by 75% to $24.99 after a few days in the market. The Pixi is the sister phone to the Pre which is a leading phone device. Amazon is selling the Palm Pre for $79 and while the new handsets by the company have been well reviewed, they have not been smash hits according to analysts.

It is true that handset prices are discounted over time, but the steep fall in the Pixi’s price is jarring as it released just last weekend. The company does not like the way the prices are falling even though it maintains that it does not have much of a say in prices offered by third-party retailers of its products. The company is facing a slew of competitors this holiday season like BlackBerry Tour (NASDAQ: RIMM) and HTC Hero, which makes its position rather tough.

Palm has stayed very quiet since its releases of the Palm Pre and Pixi devices this summer, which debuted the WebOS that was at one point seen as a key rival to Apple's iPhone.

Palm will introduce a Web-based development environment for WebOS applications, called Ares, by the end of this year.

Ares got its first public demonstration on Thursday at the Open Mobile Summit conference in San Francisco. It is designed to make it easy for developers to pull various components together in Javascript to build applications for the Palm Pre and Pixi, the two handsets that run Palm's WebOS.

Palm will open its webOS developer program in December and offer developers a choice in how to get their applications to market, the company said Tuesday.

Smartphone maker Palm plans to open a full-scale developer program to encourage third-party applications for its webOS platform by the end of the year and has just begun a trial run of its App Catalog store.

In August, Palm allowed developers to begin submitting applications for inclusion in its App Catalog, which is built into devices with webOS, the company's newest operating system. Palm is eventually looking to drive over-the-air downloads for webOS applications and give developers more options for distributing and promoting their applications.

Palm said it will stop developing new phones running Windows Mobile software, instead focusing future development on its new WebOS operating system.

The news came as the struggling handset maker reported widening losses for the quarter during which it started selling the new Palm Pre, the first device to run WebOS.