Palm Inc’s highly anticipated Pre smartphone costs around $170 to make, according to analysis by research group iSuppli released on Wednesday.

Although the Pre has not yet shipped and Palm has yet to announce a release date, iSuppli said it generated the estimate of the device’s hardware and manufacturing costs based on second-quarter component and assembly pricing. That isn’t cheap, folks.

ISuppli expects Palm will try to sell the Pre to wireless carrier Sprint Nextel Corp for about $300, but said the actual cost to consumers will be around $200 due to an expected carrier subsidy.

ISuppli likened the Pre’s functionality to the Apple iPhone.

“The similarity in features between the Pre and the iPhone clearly reveals the mark Palm is trying to hit,” iSuppli analyst Tina Teng said in a statement. “The use of a multi-touch screen — a key allure of the iPhone — and Palm’s innovative WebOS operating system, are likely to allow the Pre to appeal to a broad range of consumers.”

Time will tell if the Pre will be a hit or not. Palm had better hope so, for their survival.