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Palm prepares to take on iPhone with make-or-break Pre launch

Staff Reporter

The cellphone maker Palm is gearing up for what could be the most important product launch in its history, the release of the new Pre handset.

The cellphone maker Palm is gearing up for what could be the most important product launch in its history, the release of the new Pre handset on Sunday.

The gadget, which goes on sale at midnight in America, is being pitched as a competitor to Apple’s hugely successful iPhone - and could possibly mark Palm’s last attempt to try and rebuild its struggling business.

Since pioneering the handheld computer market in the 1990s with the Palm Pilot, and being one of the first companies to make so-called “smartphones”, Palm has proved powerless against its rivals in recent years.

The runaway success of handsets including the BlackBerry and iPhone have taken users away from Palm and eroded the company’s prospects to the point where it was forced to sell almost half the business to Elevation Partners.

But in the Pre, which was first unveiled to great acclaim in January, it believes it has a device that can generate enough buzz to rectify its problems.

Technology fans are eagerly awaiting the launch, and early reviews of the device have been generally positive—handing the Silicon Valley company a crucial lifeline in its attempt to recover from the slump.

The touchscreen Pre uses a new operating system, WebOS, that integrates much more tightly with the internet, though many have highlighted the effect that internet connectivity has on the handset’s battery, which can be charged wirelessly using the $70 Touchstone add-on.

Writing in the New York Times, David Pogue says that the Pre’s system “borrows plenty from the iPhone ... but has its own personality”, while the Wall Street Journal‘s Walt Mossberg said it was a “smart, sophisticated product”.

Joshua Topolsky, the editor of Engadget, said the device is still a work in progress, but that although “there’s no doubt that there’s room for improvement in webOS and its devices ... there’s also an astounding amount of things that Palm nails out of the gate”.

Although there is no news yet on when the handset will arrive in Britain—the American model is not compatible with European phone networks—the Guardian recently reported that O2 had secured the rights when it does finally go on sale in the UK.

One area that reviewers have said requires improvement is in the scope of the Pre’s downloadable applications—extremely limited at the moment. Palm has been incredibly tight-lipped about working with developers, and there still appear to be a large number of bugs with the service.

That has led to some concerns that Palm may not be able to match Apple’s App Store, and resulted in a broadside from the prominent developer William Hurley, who argues that Palm’s failure to work with the software community will be its downfall.

In its fight to regain its position in the market, however, Palm will not just have to cope with critics, but also Apple’s publicity machine. On Monday - just two days after the Pre goes on sale—Apple is expected to announce a new iPhone model at its annual Worldwide Developers Conference in San Francisco. The upgraded device is expected to include enhanced functions such as video, faster chips and larger memory, with the potential to make the Pre’s moment in the sun very short indeed.

It is not just pride at stake for Palm. After a torrid period in which the BlackBerry and iPhone have drastically reduced the company’s market share and profits, it is desperate for the Pre to be a success.

In March, the company revealed that its revenues for the last financial quarter had fallen 73% on the previous year—partially because buyers were waiting for the Pre—and burned through more than $100-million of its cash reserves, leaving $220-million in the bank.

Analysts estimate that Palm could sell as many as 850 000 Pre phones in its first quarter—a small fraction of the 6,9-million handsets sold in the three months after Apple launched its iPhone 3G, but enough to offer the company some respite from the gloom.

Talking to the Guardian earlier this year, Palm’s chairperson, Jon Rubinstein, said that launching a hit device was the vital first step on the road to recovery.

“We’ve been fighting the battle with basically both hands tied behind our back for the past year and half,” he said. “Now we’re getting on the playing field, and we’re going to be extremely competitive. But it’s the beginning.” - guardian.co.uk

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