For the first time in nearly two years, the iPhone faces a showdown with what could be a true iPhone challenger. It's not a BlackBerry. It's not an Android phone. It's a Palm and it's called the Pre.
Since January, when the Pre was announced, Palm has been stoking well-merited interest in the device, although no one yet knows how much it will cost (a guess: around $200 after signing up for a two-year contract with exclusive carrier Sprint), or exactly when it will be available (Palm says before the end of June).
The Pre will have some features that no other smartphones have — including being able to read one e-mail message, set, or flick, it to the side on the screen, and then open another e-mail without having to close the first one. That's pretty nifty. So is the ability to put all your contacts — from Outlook to Facebook — in one place, by a person's name, not affiliation, if you choose. But battling the Apple-Research In Motion "iBerry" juggernaut is going to be tough.
RIM's line of BlackBerrys and Apple's iPhone, with a new model expected soon, continue to dominate the smartphone market in the United States.
The BlackBerry Curve 8300 series, offered by all major wireless carriers, was the No. 1-selling smartphone in the first quarter of this year, according to research from The NPD Group. No. 2 was the iPhone (carried only by AT&T), followed by the touchscreen BlackBerry Storm (sold only by Verizon Wireless), the BlackBerry Pearl (available at multiple carriers) and fifth was T-Mobile's G1 Android phone (also known as "the Google phone").
While the iPhone wasn't No. 1 in the first quarter, it was the top-selling consumer smartphone in the country in both the third and fourth quarters of 2008, The NPD Group said. Domination by "iBerry" is fairly well-entrenched at this point.
Also, the Pre will only be available through Sprint. That alone could hurt its chances of success, some say. Sprint, the nation's third-largest wireless carrier, is still trying to stem the loss of customers while working to improve its customer and phone service.
ChangeWave Research recently described the situation as "Palm's Sprint problem." In a March survey, ChangeWave found that 17 percent of more than 4,200 cell phone owners say they won't consider buying the Pre because it can only be used on the Sprint network. The firm did note that the same percentage say they won't buy an iPhone because they'd have to use AT&T.
"The Palm Pre will be shipping with just a single carrier, and it's the carrier with the weakest results," said Avi Greengart, consumer devices research director for Current Analysis. "It's going to be a challenge for Sprint to cut through the noise and get people to buy the Pre."
Ross Rubin, director of industry analysis for The NPD Group, says the "main risks would be if Sprint prices the device out of reach, or if Apple preempts the Pre by announcing something that leapfrogs it," such as a new iPhone, which could be unveiled next month. "But even in that case, carrier exclusivity minimizes head-to-head competition," he said.
Even so, AT&T has prepared a side-by-side comparison sheet of the Pre and the iPhone to prep its sales staff for customers with questions about why the iPhone might be better.
"Palm will also likely pursue multiple carriers as it has in the past," said Rubin, music, no doubt to the ears of many potential Pre owners.
Deck of cards approach
Palm itself is saying little about the device at this point, other than what it has posted on its Web site. The 4.8-ounce phone will have a slide-out QWERTY keyboard and a 3.2-inch touchscreen. Read that only and you think, "Yeah, and so what? Sounds like a lot of other phones."
But it's the Pre's hardware and software that will make that screen come alive with the kind of practicality, functionality and ease of use that may exceed that of the iPhone or any BlackBerry.
Palm's new webOS operating system will let users do multiple things at once, without having to toggle, click or maneuver through menus or back arrows.
In a January presentation at the Consumer Electronics Show, Matias Duarte, Palm's senior director of human interface and user experience, showed how programs, and even e-mails and contacts, appear on the Pre's screen, as a "deck of cards you can shuffle," vs. icons to be clicked on, or a virtual pile of paper to sift through.
"It is designed from the outset for multitasking in a way that the iPhone, for example, is not. You are encouraged to run multiple applications on the Palm Pre and swipe your finger back and forth amongst the running applications, jumping back and forth between tasks. That's not something the iPhone allows you to do."
The Pre, Rubin agrees, "extends many of the appealing aspects of the iPhone, including a large touchscreen, strong (Web) browser and sleek profile. It adds a physical keyboard and the ability to run multiple applications simultaneously and move fluidly among them."
Pre applications "are created using the same tools and techniques as Web sites, and the system is savvy about integrating information from social Web sites such as Facebook," he said.
And those who are longtime Palm users, of both the Treo and Centro, will be able to use their current or older Palm programs on the Pre with the help of a "Palm OS emulator" that is part of the Pre.
There are tens of thousands of those programs, with "hundreds of thousands" more to come for the Pre, said Ed Colligan, Palm's president and chief executive officer, at the Consumer Electronics Show.
The app store issue
Like Apple, and recently RIM, Palm will have an "app store" for applications to be downloaded directly to the phone. The irony is Palm began making apps, or programs, available to Palm users, mainly via computer, long before the iPhone was a glimmer in Apple's eye, and well before BlackBerrys became synonymous with corporate communications.
But it was Apple's App Store, started last summer, that captivated users, with programs ranging from games to personal finance software. The App Store has more than 35,000 programs available, and more than 1 billion downloads as of this month. RIM, meanwhile, recently started BlackBerry App World for devotees of its devices, last month. T-Mobile G1 users, too, have an Android Market for programs.
"I think there is room in the market for the Pre, and certainly, it's a perfect option for Treo customers who want to upgrade," said Allen Nogee, In-Stat wireless infrastructure and technology analyst.
"Whether it can succeed in the long run will depend on luck and how successful Palm can get the ecosystem running," meaning its app store, as well as accessories and other "follow-on devices," he said.
"Not only do the iPhone and BlackBerry have strongly established brands in the smartphone space — even though the Palm brand has meaning, particularly in the United States — but you have the issue of the app stores," said Greengart.
"RIM is just getting off the ground with its (app store), but Apple is doing spectacularly well and is seen as an applications platform," he said. "It's questionable whether Palm can interest developers in committing" to creating the number and kinds of programs that are already out for the iPhone.
"Clearly, for the first time in more than two years we are picking up increased consumer interest in Palm," wrote Paul Carton of ChangeWave Research in a recent report about Palm, RIM and Apple.
"But above and beyond the Pre's performance, Palm itself will have to outperform mightily going forward for it to be competitive in this race."