Palm, Sprint, and the Pre: One Egg-Filled Basket

This story is one of two gladiators of the tech industry, who have battled through failed mergers and failed product lines, had the ground pulled out from under them by massive and thriving corporations, and who have struggled to keep up in a market that is so competitive and so unforgiving that one mistake could be your last.

And now, Sprint Nextel and Palm are placing their hopes in one promising new smartphone equipped with a brand new OS: the Palm Pre, armed with the new Palm webOS mobile platform.

Palm Pre and Palm webOS

From what I can tell, the Pre has more in common with recent smartphones (Apple iPhone, T-Mobile G1, BlackBerry Storm) than it does with earlier Palm smartphones. The phone does not use a stylus, but rather jumps on the finger-touching bandwagon. It offers comparable specs to the iPhone and G1 but, perhaps as a nod to the older Palm models, still has a physical keyboard that slides out directly below the device (as opposed to the horizontal slider on the G1 or the iPhone's lack of a physical keyboard).

While the phone is definitely rating well in terms of speed, style, functionality, and basic specs, perhaps the most important variable is the Palm webOS. We've seen a plethora of new mobile OSs recently, so it already has that annoyance factor working against it. (A trend which, on an unrelated note, may benefit Windows Mobile and Android.)

In a recent press release, Palm pledges that the new OS "is the first mobile platform to automatically bring your information from the many places it resides—on your phone, at your work or on the web—into one simple, integrated view." If the OS is really as inter-connected and revolutionary as Palm claims, then it may offer a significant advantage to busy, on-the-go individuals who have a need for strong integration between their mobile device, work computer, and home office.

History of Palm and Sprint

A decade ago, Palm was the authority on mobile devices, with the ever-popular PDA. However, as mobile devices (and more specifically, smartphones) have caught the eyes of some of the biggest industry players, Palm has been recently drowning in the waves. Palm held onto its aging Palm OS for too long—by the time it made the switch to Windows Mobile, that OS already started falling out of favor.

Sprint Nextel, the third largest wireless carrier, has been a struggling giant in the telecommunications market for quite some time. After a rough acquisition of Nextel Communications at the end of 2004, Sprint Nextel has struggled to integrate the two brands. Sprint Nextel also has a high rate of dissatisfied customers leaving Sprint to join other networks, due to poor customer service. Combined with high debt and little innovation in its wireless plans in recent years, the company continues to fall behind the competition.

Looking to the Future

Will the Pre save Palm and Sprint Nextel? It's hard to say. While the Pre is no doubt a competitive device, I'd surmise that many people interested in a smartphone already scooped up an iPhone, G1, or Storm. Even if these individuals wanted to make a sudden switch, that isn't very feasible, when you consider that all of these devices are typically purchased with two-year contracts. As a final note, even if the Pre rates high among tech gurus, it doesn't mean it will gain the same kind of buzz and traction in the market as devices such as the iPhone. This will leave Palm once again banking on the enterprise market, which is currently overstressed, out of money, and not interested in accruing high-expense "nice to haves".

That being said, the Pre could very well give Palm a much-needed boost to remain as a niche player in the market, even if it never sees the same kind of grip on the market that it once had. As for Sprint, the outlook is potentially even more dire: even if the Pre hits the market in a big way, Palm has already stated that they are open to offering the Pre through other wireless carriers. If the greater wireless market is any reflection, much of the money Sprint could be banking on would be open to the wallets of Sprint's thriving competitors.

Related Reading:
Motorola Backs Google's Android, Others Will Follow
Smartphones Push Onward into the Enterprise
iPhone 3G
Blackberry Storm: The Big Little Thing
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