Why the Pre won't save Palm

Time is money, as the saying goes, and few cautionary tales better exemplify the old adage than Palm, which stands to pay dearly for taking its sweet time fine-tuning webOS, the long-awaited mobile operating system the company finally unveiled during last week's Consumer Electronics Show. Palm first announced it was working on the Linux-based operating system all the way back in April 2007, initially promising to release the platform (often referred to as the Palm OS II, or "Nova") by the end of that year. The first in a series of delays struck a few months later, when Palm said the platform would not appear until sometime in 2008. As recently as late May of '08, the firm still insisted that webOS remained on track for release by year's end--during an appearance at the JP Morgan Tech Show in Boston, Palm CFO Andrew Brown admitted the project had been in the works for close to three years, adding "it has not been an insignificant investment." But in September, Palm finally acknowledged what everyone else already suspected: The operating system would remain under wraps until 2009.

The toll for such a protracted developmental cycle appears massive: In the years since webOS first began taking shape, rival operating systems like Symbian, BlackBerry and Apple's Mac OS X have beaten the existing Palm OS like a rented mule. Late last year, market research firm Gartner reported that the Palm OS now ranks sixth in terms of worldwide smartphone OS market share, claiming just 2.1 percent of the overall market--by comparison, the iPhone, which wasn't even released when Palm first announced webOS's pending arrival, now owns 12.9 percent market share. No wonder that in December, Palm announced that revenues during its second fiscal quarter would fall between $190 million and $195 million, a massive dropoff from the previous fiscal quarter, when the firm reported a loss of $41.9 million on revenue of $366.9 million.

Initial buzz on webOS is certainly favorable--with a few exceptions, most early reviews agree the operating system lives up to expectations. Developed expressly for mobile use, webOS promises users a constant connection to the web; its signature feature is Palm Synergy, which Palm says automatically brings together user information like linked contacts, layered calendars and combined messaging into one single, integrated view. webOS also offers toggling between multiple open applications, customized alerts and a multi-touch UI that Palm says "lets you move easily between activities like flipping through a deck of cards and rearrange items simply by dragging them." No less important, webOS was designed to enable Palm's ecosystem of partners (including developers, hardware vendors and accessories manufacturers) the flexibility to create core solutions to complement the platform and product line. In particular, Palm promises the developer community a rich open environment enabling more efficient application creation--webOS also will allow coders to distribute their apps over-the-air via an on-device Palm application store.

But is it too little, too late? Maybe--or perhaps Palm's problem this time around is too much, too soon. The firm cranked up the hype machine far too early, and now it appears poised to squander all the press attention, developer curiosity and subscriber interest surrounding webOS following last week's announcement. Details on the commercial launch of the Pre, the first webOS-based device, remain frustratingly scarce--all we know right now is that Sprint will release the smartphone sometime in the first half of 2009, which could mean anytime between now and June 30. That's a lifetime in terms of the collective consumer mindset, and unless there's an iPhone-caliber marketing campaign to accompany the Pre when it finally does arrive, the device will generate little noise. Moreover, there are few concrete details for developers interested in creating applications for the webOS platform: Palm has yet to expand on its on-device app storefront plans, and elements like pricing and revenue sharing remain a mystery. Not that developers can commence work on webOS apps anyway, mind you--the SDK for the Mojo application framework (based on the HTML5, CSS and JavaScript standards) is presently in private pre-release, and a timetable for its public release is currently unknown. It seems inconceivable that Palm could leave so many major details unaddressed, especially given how long webOS has been in development. But whether too little too late or too much too soon, it really doesn't matter--now more than ever, Palm looks like a company that's out of time. -Jason