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Palm’s (PALM) last chance for survival is going on sale Saturday. Operator Sprint (NYSE:S) has almost as much at stake. It claims an exclusive on the Palm Pre through the end of the year, despite Verizon’s (NYSE:VZ) hope to offer it real soon now.

A number of sites (ZDNet, PC World, Barron’s) are summarizing the Pre reviews, which range between glowing and fawning. Take for example this AP review:

Move over, iPhone. You've had two years on top of the smart phone world. Now there's a touch-screen phone with better software: the Palm Pre.

In a remarkable achievement, Palm Inc., a company that was something of a has-been, has come up with a phone operating system that is more powerful, elegant and user-friendly. …

So webOS makes the iPhone look clunky, which is stunning in itself. It also thoroughly shows up Microsoft Corp.'s (NASDAQ:MSFT) Windows Mobile. That operating system has had multitasking for years, but few users have appreciated that. Rather, Windows Mobile has been blamed for making phones clumsy and slow. Now, webOS comes along and does multitasking right.

I am more that a little skeptical. Reporters like the underdog, both for personal biases and also because it makes for a more interesting “horse race.” So just because they say the Pre is better doesn’t mean that it is. (In fact, the only claim is that the software is better, not that the hardware is better.)

However, suppose the Pre is better: so what? We figured out decades ago that the aphorism “build a better mousetrap and the world will beat a path to your door” is an engineer’s self-delusion.

The reality is that better is not the only reason people buy phones. There’s also carrier switching costs, status, price, form factor/convenience, and now the availability of third-party complements.

Palm is trying to leverage its hacked iTunes download capabilities
to equalize one difference — the iTunes store. (Apparently Apple (NASDAQ:AAPL) is trying to break that effort via the iTunes 8.2 update).

Even with iTunes songs, Palm still needs an app store. Or rather, even with an app store, it needs applications — which means it needs to seed developers with tools. And then developers need to be convinced they should develop (unless they decide there’s an inherent advantage in coming early to a tiny but hopefully growing market).

So the odds are long. The Treo, once dominant in the US, has been a stagnant niche product over the past 3-4 years.

The most optimistic thought would be that no one thought Apple could enter the market late and challenge Nokia (NYSE:NOK) and Research in Motion (RIMM). Clearly Apple succeeded and continues to have momentum. It’s possible that Palm could succeed too, but my hunch is that Apple, RIM and Palm are splitting the same market — which means that Palm will be competing against two very entrenched competitors.

Sprint is the low cost provider among the US Big Four operators. Perhaps Sprint and Palm can bring smartphone and 3G services to the masses. One can only hope.