@CES, Las Vegas – That was Wall Street’s verdict on Thursday when the struggling company showed off its long-awaited new operating system and the new Pre smartphone (the stock bounced by 35 per cent, though it’s still 50 per cent off its 12-month high).
If you really had to bet your company on a single gadget, this is not a bad one to pick.
In its favour, the Pre can boast some of the best features of the iPhone (a multi-touch screen that you can “swipe” across to move objects around or “pinch” to shrink or zoom images,) along with a couple of big things the iPhone doesn’t have: a slide-out keyboard and a replaceable battery (though there are trade-offs in all this, making the Pre fatter than the iPhone, with a smaller screen).
There are also signs that Palm has not only learned from the software interface of Apple’s iconic smartphone, but has gone one step better. To switch between applications on the iPhone you have to open and close them: on the Pre you can shuffle them like a deck of cards, swiping across the screen to switch between a range of live applications (all of this made the menu-driven user interface on the first Google Android phone, from HTC, look even more clunky).
This is also an operating system that was designed to live in a connected world, as its name, Web OS, suggests. Select the contacts, calendar or email features, for instance, and you can see an integrated view of information held in all your Web-based accounts consolidated in one place. Integrated messaging means seeing IM and SMS messages from the same person displayed together, in chronological order.
The problem, of course, is that Palm is launching the Pre into a very crowded market against some of the most innovative tech companies in the world, and doing so in the teeth of a fierce recession. Oh, and it is also facing the rapid decline of its existing business.
Apple is onto its second generation iPhone already – and, more important, now has the App Store, which is doing much to drive interest in both the iPhone and touch.
Other than claiming an extremely simple development environment that would encourage the creation of third-party applications for the new OS, Ed Colligan, Palm’s CEO, had nothing to say about whether Palm would come up with its own version of the App Store.
Also, while he promised to bring the Pre out in the first half of 2009, there was no indication of a launch date or pricing for the device, and the only operator to carry it initially will be Sprint in the US.
Still, the Web OS and Pre at least have a chance of reviving Palm’s claim to being one of the companies that best understands how to bring ease of use to complex personal devices. And they vindicate Elevation Partners’ recent vote of confidence in offering to invest $100m into the company at $3.25 a share (compared to a closing price on Thursday of $4.45.) Under the terms of the Elevation investment, other existing shareholders will now get the chance to put up half of the money themselves at that lower share price.
