A year and a half ago, Palm (PALM) bet its future on its new operating system and the phones that go with it. After an extended development period, Thursday in Vegas, the company finally showed its hand.
To a boisterous CES crowd mixed with people harboring both high expectations and some expectations of failure, the company revealed webOS and the Pre handset. The 8GB phone comes loaded with GPS and WiFi. It has a 3.1inch screen and a 3 megapixel camera. The user interface is fully touch-enabled, working with gestures and point contact. It also hosts a slide-out QWERTY keyboard.
Unlike some smartphones which resemble clunky, iPhone clones, the Pre looks sleek and attractive. At 3.96 inches by 2.35 (.67 thick) it’s slightly smaller than Apple’s (AAPL) ground breaker, though a bit thicker due to the slide out keyboard (see comparison chart. Article follows after.).
| Palm Pre | iPhone 3G | B.B. Storm | T Mobile G1 | ||
| Length | 3.96in | 4.5in | 4.43in | 4.6in | |
| Width | 2.35in | 2.4in | 2.45in | 2.16in | |
| Thickness | .67in | .48in | .55in | .62in | |
| Weight | 4.76in | 4.70oz | 4.8oz | 5.6oz | |
| Screen Size | 3.1in | 3.5in | 3.25in | 3.2in | |
| GPS | yes | yes | yes | yes | |
| WiFi | yes | yes | yes | yes | |
| Camera | 3 MP | 2 MP | 3.2MP | 3.2MP | |
| Storage | 8GB | 8GB or 16GB | 1 GB plus microSD Card | 192MB RAM, 256MB ROM, plus SD Card Expansion |
In a tip of the hat to Apple (where Palm’s Jonathan Rubinstein earned his stripes building the iPod line) and the company’s magnetic power cables, the Pre goes a step further. It can be recharged with a wireless magnetic charger (sold separately). It also supports a USB mini-cable.
Inside the case, the Pre is loaded with technology. A proximity sensor is set up to disable the touchscreen and turn off the display when the phone gets close to your face. To save power, an ambient light sensor can monitor the environment and dim the display to save power in a dark room. Like the iPhone, an accelerometer measures movement and reorients the display from horizontal to vertical as needed.
While the hardware is slick – polished enough to measure up with other high end smartphones – the fate of Palm and the Pre (which, given the stakes, seems aptly pronounced "pray") lies with the software. Palm’s calling the OS a “new kind of platform” and CEO Ed Colligan is pledging “game-changing simplicity.” In a press conference, he said the pair will "redefine the center of your access point to the internet."
Some of the features are indeed innovative and brilliantly simple in their result. Contacts, for example, are automatically linked across multiple accounts. Synergy, as Palm is calling this feature set, can seamlessly integrate and synch address books across accounts from Outlook (Exchange supported), Google, Facebook or elsewhere. The same is true for email aggregation.
Calendars too are designed for cross-usage integration. A Pre owner will be able to maintain separate calendars for home, personal or professional events. When desired, the OS can “layer” these to view on one calendar, or it can keep them separate.
Other features include the ability to run multiple applications simultaneously, integrate instant messaging and text messaging displays, full multimedia integration (including support for album cover art and browsing), and a faster “desktop grade” browser that will handle most web coding standards (CSS, HTML, XML), Flash excepted.
The Pre is scheduled to be available first in the United States exclusively in the first half of 2009. Initially, Sprint (S) will have it exclusively. At a later date, a world-ready UMTS version will also be available. Sprint’s pricing hasn’t been determined.
Palm’s financial health has fallen precipitously while the company’s worked to develop the new systems. In the second quarter, Smartphone sell-through was down 13 percent year over year to 599,000 units. Smartphone revenue was down 39 percent to $171.0 million. Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization) for Q2 totaled a loss of $55.8 million. Palm raised extra capital from Elevation Partners to help carry the company forward through the delivery of the new OS and phone.
The stakes for the company are unquestionably high. It will take some time to determine if the Pre and OS will be significant enough to restore the company’s fiscal wellbeing, and bring back market share lost in recent years to Apple and RIM’s (RIMM) innovations. The smartphone market is highly competitive. But if the measure of a phone is features others will likely copy, at first glance, the new Palm OS does impress and the Pre is off to a sound start.
