O2 UK believes its launch of the Palm Pre this Friday will help the company continue to beat rivals. “We will continue to outperform and the Palm Pre will be a key part of our armoury in that outperformance,” said Matthew Key, head of Telefonica’s European businesses outside of Spain, in an interview with the Financial Times (FT). In July Telefonica (parent company of O2) confirmed long-running speculation it had signed an exclusive agreement with Palm to offer the high-profile device (pictured) in Spain, the UK, Ireland and Germany. In June US operator Sprint Nextel became the first operator worldwide to launch the Pre, whilst Canadian operator Bell soon followed. US operator Verizon is rumoured to be considering a launch too.

The device has been hailed by analysts as the strongest challenger yet to Apple’s iPhone, and is also a potential business saviour for troubled vendor Palm. O2, currently the UK’s largest operator by subscribers, suffered a setback last month when Vodafone and Orange announced they will begin selling the iPhone soon, breaking O2’s exclusive grip on the device. The FT report cites Bernstein analysts as stating that O2 UK’s revenue growth over the past three quarters can be solely attributed to the iPhone and that without Apple’s handset, sales would have shrunk year-on-year. A successful Pre offering is also important to O2 UK as it will lose its market leadership when T-Mobile and Orange merge their UK operations.