Pre may be a leap too far as Apple prepares update

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Pre may be a leap too far as Apple prepares update

By CAROLINE GABRIEL

Published: 14 January, 2009

READ MORE: Apple

Having successfully created a major buzz around its new operating system and Pre smartphone, Palm is already coming back down to earth to face criticisms of its platform, even as analysts - having missed out at MacWorld - expect a refresh of the iPhone line as early as April. This would steal a lot of thunder from the early shipments of Palm Pre.

One of the key complaints about the Pre, now emerging from the all-important mobile developer community, is that its new Linux-based Web OS will not work with older Palm applications, created for devices like the Treo that run the original Palm operating system. That system's market share may have been dwindling overall, but it remains strong in the enterprise, and attracts a fierce loyalty from its programmer base, as highlighted when Palm launched its application store late last year, boasting twice the number of products as Android Market.

Palm spokespeople said the company was not emulating Palm OS apps on the Pre, but would allow third party emulators. This is an all-or-nothing approach to the new OS that some observers believe is a step too brave, cutting off the company's lifeline of its existing apps base. Kris Keilhack, associate editor for Palm Infocenter, told Techworld he had not been expecting a complete cut-off of Palm OS. "This is really the paradigm shift you hear about," he said.

The software developers' kit and new Pre apps store will be made available "close" to the time of first shipments of the Pre, these will be exclusively via Sprint Nextel in the US in the second quarter, and "before July" to other regions, though international carriers have yet to be announced.

Further details of the Pre are emerging, including a novel charging device called Touchstone, which applies inductive technology via a gadget shaped like a hockey puck, on which the handset is placed to charge up. The Touchstone will be sold separately and requires the back of the phone to be replaced with one that includes magnets and circuits.

Palm will be hoping to get some breathing space ahead of any counter-move from Apple, to bask in the intense attention being paid to the Pre. It may not get its wish, since some analysts are expecting an iPhone refresh at an earlier stage than would be expected in a normal economic climate. Richard Gardner of Citigroup is looking for a new iPhone as early as April, based on his assessment of channel inventories.

"Several sources confirmed the introduction of a new 3G iPhone during [the second calendar quarter]," Garder wrote in a research note yesterday - he believes disappointing sales of iPhones and iPods during the first quarter of 2009 will spark the update. Another pundit, Shebly Seyrafi of Caris & Co, issued a note maintaining an 'above average' rating on Apple but reducing his share price target from $165 to $155, to reflect expected lower iPhone and iPod orders. He also cut estimates of shipments for the two device families - for the iPhone, from 11.7m in 2008 and 22.3m in 2009 to 8.9m and 17.7m; for the iPod, from 54.6m and 61.2m to 52.1m and 57.3m. Seyrafi still expects Apple to meet its goal of selling 10m iPhones, says Apple Insider, but does not think the vendor will put any real near term pressure on the handset giants, despite promised improvements in the SDK to support more enterprise apps.