If a single hit product can save a company that has fallen on hard times, then Palm’s Pre smartphone, which goes on sale at midnight Friday in the US, probably has as good a shot as any.
Yet, with competition intense and Apple set to unveil improvements to its iPhone next week, odds that the Pre can revive the iconic maker of PDAs from the 1990s still look long.
The Pre has added nearly $1.5bn to Palm’s stock market value since it was unveiled this year, salvaging a troubled investment by Silicon Valley private equity firm Elevation Partners, which holds a stake of about 33 per cent.
The device has earned favourable early reviews. But catching up with Apple – not to mention other groups crowding into the smartphone market such as Google, Nokia and Research in Motion, maker of the BlackBerry – from a standing start is a tall order. “They’ve taken on an awful lot,” said Ken Dulaney, an analyst at Gartner.
Taking its direction directly from Apple’s strategy, Palm has produced its own operating system and hardware from scratch.
The company will also shoulder the costs of marketing the device and is building an “app store” to showcase applications from independent developers.
It was essential for Palm to launch the Pre ahead of Apple’s next big iPhone announcement to garner attention, said Richard Doherty, an analyst at Envisioneering.
However, that deadline has hampered its early prospects with production shortages expected to limit availability in the early weeks.
Also, Palm only has a test version of an app shop, with a small number of applications, available at launch. The Pre will only be sold at launch by Sprint, third largest of the US wireless carriers, which has struggled to match the network quality and service of its rivals. However, Palm hopes the Pre will find an untapped market among Sprint customers who have not had access to the iPhone.
Early consumer reaction to the Pre could make the difference between Palm being able to fund a family of handsets or being forced to seek a stronger partner.
“Palm will go on,” says Mr Doherty. But he adds whether that is as an independent company, or as a division of a Nokia, Microsoft, or RIM, “really depends on what happens in the next seven days”.
