Ovum Analysis --

Palm Pre coming to an iPhone operator near you

Tony Cripps, principal analyst at Ovum

A coup for Telefonica or a coup de grace for Apple?

Telefonica is no doubt pleased to have secured the next-great-smart-phone-after-the-iPhone. However, we can’t help feeling that it may have scored itself something of an own-goal.

While the Palm Pre, with its internet-inspired webOS, looks an interesting concept (we haven’t had a chance to use it ourselves), we’re left wondering how it will compete with the iPhone on the same turf.

For one thing, the two devices will be competing for the same customers. For another, the iPhone is more than a mere poster child for applications on phones and handset integration with the Web: it’s the benchmark.

It’s not just consumers that think that. Developers do to. Where Apple’s App Store long ago surpassed one billion downloads and 50,000 apps, the Pre looks less well loved: at launch on Sprint’s US network, 18 applications were available in the Palm App Catalog with one million downloads its most recent milestone (Ovum doesn’t think emulation of old Palm OS apps counts).
If you’re a Telefonica customer in the UK, Ireland or Spain and you’re in the market for an iPhone-style experience the iPhone still looks the better bet. Even a heavily subsidised Palm Pre will do well to win the hand of high-end consumers when faced with the two devices side by side. Although some long-in-the-tooth Palm aficionados may be tempted.

Given its early stage of evolution, Palm would have been better off with a European telco partner that isn’t already beholden to Apple. Offering the two devices side by side, looks like a one-sided fight to us, and potentially one that puts the webOS cat back in the bag before without really lifting its head out (O2 Germany, where the iPhone isn’t present, should offer it more opportunities).

Pre faces stiff competition for developers

While the groundswell of interest from developers in the Pre is hardly overwhelming, it’s also not that surprising. Palm has been very selective about providing access to the Pre’s “Mojo” SDK so far, although it plans to make it available to all by the end of this summer.

Can it succeed? Palm enters a competitive market where the battle for developers’ hearts and minds is being fought out by far more significant players, despite the residual fondness the Palm brand continues to have in North America. Apple, Google, Microsoft, Nokia and RIM already have their claws deep into potential mobile developers and there is only so much fragmentation a developer can tolerate.

Just ask Nokia, which is deep into efforts to simplify its own developer offering in the face of the iPhone onslaught in order to hold onto the allegiance its smart phone market share commands.

Simplicity may be on the Pre’s side. While Linux-based, webOS development is centred on HTML5 and JavaScript and is therefore already well understood by web developers. But what chance has Palm of rallying the great and the good of application and content developers (as well as the masses) to webOS when even Nokia is struggling to keep them onside?

Developer support, as much as an ingenious user experience, will make or break these high-end device offerings going forward.

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