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The Palm Pre: Setting A New Standard
Comment by William Stofega
As much as it announces the return of Palm to the spotlight, the release of the Palm Pre on June 6, 2009 will reinvigorate the battle for high end devices. Thus far, Apple's iPhone has been the star, however, with the launch of the Palm Pre, the competition is likely to become more intense. Although the Apple iPhone has set the standard in terms of high end Converged Mobile Devices (CMDs) we believe the Palm Pre is a strong contender for those who are looking for a high end device that keeps pace with the iPhone. The Palm Pre will retail for $199 after a $100 mail-in rebate at the Sprint store (and $199 with a $100 instant rebate at Best Buy and Radio Shack).
The unveiling of the Palm Pre and its new webOS operating system has generated an avalanche of positive press and speculation for Palm. Company management has acknowledged that its device portfolio has stagnated but have been promising changes and IDC believes that the Pre delivers upon this promise. Although the form factor and appearance of the handset itself has been instrumental in creating the "buzz" for the Pre, the capabilities of webOS will play the most important role in ensuring the success of the device.
In discussing the Pre, Palm referenced the need to simplify and make technology invisible to the end user especially when accessing information. From the beginning Palm stressed that the Pre would be a device that will be able to integrate information from a variety of sources, a concept that Palm has labeled Synergy. In debating the target market for the Pre (enterprise or consumer), we believe that Palm investor Roger McNamee makes the best case for the device: it is for "busy people."
First Impressions of the Pre
As might be expected for an iconic device, the Pre comes packaged in a beveled box that immediately sets it apart from other devices. Perhaps more importantly, getting the Pre out of the box and up and running is a fairly simple procedure. Once the Pre is powered up, a preloaded tutorial guides the user regarding how to use the touch screen as well as setting up applications to take advantage of Synergy. This feature enables Pre customers to aggregate contact information from a number of different sources such as Google and Facebook as well as a variety of calendaring formats to create one logical schedule. Unlike the iPhone, the Pre has the ability to run several applications at once. This is a differentiator, but more importantly it enables Pre users to utilize applications in a conceptually new manner. The Pre "thinks" of applications as "activity cards." Functionally, this allows the user to utilize multiple applications and open and move easily between them. Thus the ability to run multiple applications in the background is about more than bragging rights: the technology is key to enabling a core differentiator for the Pre.
The size of the Pre is smaller than other comparable devices and fits comfortably in the palm of one's hand or in a shirt pocket. Utilizing Cypress Semiconductor's capacitive TrueTouch technology the 3.1" multi-touch screen is responsive to touch as well as a variety of gestures. For swipe, a user utilizes a black area near the bottom of the screen. One of the more interesting gestures is the flick. This gesture enables users to close an application by simply flicking the activity card towards the top of the screen. The HVGA color screen with 24 bit color is dazzling in terms of color replication. Unlike the iPhone, Palm decide to create a device that included the benefits of touch with the accuracy of a full Qwerty keyboard. The keyboard is a bit mushy but gets the job done. We believe that the Pre's implementation of its screen technology is second to none.
Although not part of the base package, the optional inductive charger, known as the TouchStone, is a welldesigned addition to the Pre and worth $69.95 price tag. Finally, the integration of the Pre's display and OS with the camera allows for a relatively simple picture taking experience.
webOS and App Catalog
Palm emphasized that despite continuous refinement and development in mobile operating systems, many of these platforms seem to incorporate design philosophies that are simply outdated. In building the webOS, Palm focused upon jump starting third-party application development by utilizing standards-based web development tools. Thus, anyone with HTML, JavaScript or CSS experience can begin designing new applications for the Palm Pre. Although webOS has already won kudos from both the developer community and the trade press, the lack of a fully stocked ready to go applications storefront such as that which is available for the iPhone has already been singled out as a disadvantage. Finalizing the Pre App Catalog, while coding for a brand new operating systems on for a brand new piece of hardware presents an incredible challenge. IDC believes that the Pre will need to launch App Catalog soon, however it is hardly a disadvantage. For instance, the lack of an application store did not hinder RIM in increasing its share over the iPhone in the U.S. during 1Q 2009.
Sprint Relationship
From the very beginning, Palm faced some criticism over its choice of carrier partner and IDC agrees that Sprint has had its challenges in the past and faces some challenges moving forward. However, in meetings with Sprint executives, IDC believes that management is making the right choices for the overall company as well as preparing the Sprint staff for the launch of the Pre. Details surrounding the length of Sprint's exclusivity agreement with Palm to sell the Pre have been subject to speculation especially as it relates to AT&T and more importantly Verizon. However, it is important to realize that Palm has ambitions for the Pre that extend beyond the U.S. market There are expectations that the Pre will launch with Bell Mobility in Canada, Telefonica's subsidiary O2 in the UK and Telefonica in Spain and Latin America.
Ramon Llamas, Steve Drake and Ryan Reith contributed to this link.
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