By Slash Lane

Published: 03:50 PM EST (12:50 PM PST)

Palm this week parted ways with the ad agency that produced its widely panned advertising campaign for the Pre smartphone. And U.S. wireless carrier T-Mobile is offering up to $350 for iPhone trade-ins for new customers who switch to the HTC HD2.

Palm, Modernista split

According to Advertising Age, Palm has severed ties with its ad agency, Modernista, and is already talking with other companies about taking over for promotion of its line of WebOS-powered smartphones. Modernista was responsible for the Pre's television commercials since the device launched last year.

The advertising campaign featuring a pale woman showing off the features of Palm's handset was ridiculed on the Internet as "creepy" and "unsettling" by some.

As its advertising campaign fell flat, sales of the Pre and Pixi smartphones were very soft, even with the addition of Verizon Wireless as an official carrier. The Pre Plus and Pixi Plus are available exclusively through Verizon. Palm also has plans to offer two WebOS devices on AT&T's network at some point this year.

Advertising Age noted that Modernista, who represents the National Park Foundation and TIAA-CREF, has fallen on hard times recently.

"This is yet another major setback for Modernista, which lost its biggest account, General Motors' Cadillac brand, late last year," the report said. "Since the carmaker shifted its account to Publicis-backed BBH, New York, Modernista has been forced to cut staff, and in December shuttered its three-year old Amsterdam office."



T-Mobile tries to entice iPhone owners to switch

As revealed by TmoNews, participating T-Mobile dealers are offering as much as $350 towards the purchase of an HTC HD2 through May 19 for iPhone owners who agree to trade in their handset. If the phone is in working condition, it will be eligible for at least $100 in credit towards the purchase of HTC's new big-screen handset powered by Windows Mobile.

The HD2 was specifically cited in Apple's lawsuit against HTC, filed in early March. Apple has accused the Taiwanese smartphone maker of violating 20 iPhone related patents. Though most of the accused handsets run Google Android, some Windows Mobile phones, including the HD2, were named by Apple for their use of hardware decoders.

As T-Mobile hopes to court some iPhone owners, some have speculated that Apple could make its handset available on the carrier's network this year. A potential jump to T-Mobile, even though it is the smallest of the four major wireless carriers in the U.S., would be a simple move for Apple because both AT&T and T-Mobile operate GSM networks. Though T-Mobile's high-speed 3G connectivity operates on a unique 1700MHz spectrum that is incompatible with the current iPhone, the addition of that frequency to a future hardware model would be much simpler than adding compatibility with Verizon or Sprint's CDMA networks.