Palm is in some serious trouble, iPhone has definitely reduced if not killed Palms chances of making the desperate come back they need. It's really hard to tell who did what wrong in this situation. Palm had a great setup and awesome development cycle, the media tried hard to cover just the facts, and Apple did what they should tried to kill their competition before they made it to the market.

Why is Palm in Trouble?

If you look at the feature set that palm will be launching (from cnet) , it's immediately clear that Apple matches every feature the Pre has with it's OS 3.0 release. It also really destroys the Pre in several areas like the app store, memory size, and more. The main problem that the Pre is facing is that it is going to be a Sprint exclusive! Sprint currently has 18.9% market share, according to cellular-news.com and seem to be losing customers rapidly. This probably has a lot to do with the iPhone and marketing efforts by Verizon.

For the Pre these numbers have some serious implications. First if you are a current Sprint customer you probably aren't searching for a state of the art piece of hardware and you probably just don't care about anything. Secondly, if you have to switch from one network to another just to get a sweet phone, are you going to choose the phone with a long track record, huge user base, and well known pitfalls or are you going to choose the phone that like 5 guys have used, hosted by a carrier that has experienced a mass exodus in the last year or two, and could have god knows what problems? The iPhone seems like the clear choice as long as the prices are similar.

Can the Pre Be Saved ?

The Pre has some pretty slim chances of a making a market impact of any kind. It's only real chance is to reach markets that Apple has so far neglected. That's right, the value market. The Pre would only have a conceivable chance at this point if the cost of the phone was extremely low and if the data plan started way low. The data plan could be tiered and go way into the stratosphere, but it does have to start low. The only other option that Palm has is the release of some outrageous feature.

I actually see some room for Palm in this aspect because they haven't released much information on new features since January, when they announced the Pre. They have also kept a very tight lipped camp and kept all demos of the Pre very controlled.

The Reality

I think we are about to experience one of two things. The smart thing for Palm to do would be to delay the Pre. Sometimes, you just have to know when your number is up. Say something like " Hey, Apple has won this round but we will win the War" , but in a more professional way.

The second thing would be utter and total failure. Palm really backed themselves into a corner when they promised a June release of the Pre. If they deliver on this date, I can almost guarantee we will see more than one major feature dropped. I think the true reason that Palm has been so tight with info and with demos is because they are behind. If Palm does not delay the release of the Pre I foresee one of the biggest marketing and deployment bungles of the last couple years.

I guess there is a a third option, Palm hires one of those slave drivers from the movies and his trusty Giant drum hitting guy. They push the Palm developers until they start dieing of exhaustion and then they just barely make the deadline. (Something Like this, minus Captain Picard)

All in all I think we can all agree that Palm is in pretty bad position and Apple has made all the right moves by making it to market early. Expect to see a giant Pre debacle coming your way in June