5 Reasons the Pre Can`t Save Palm

Palm reported a $105 million narrower-than-expected loss during its fiscal fourth quarter. The company is hopeful for a turnaround, banking mostly on the promise of its just-out Pre smartphone, a device that company executives have all but declared an organizational life preserver.

"The launch of Palm webOS and Palm Pre was a major milestone in Palm's transformation," said Jon Rubinstein, Palm's CEO, in a statement. "We have now officially reentered the race.”

Problem is, that life preserver may not displace enough water to keep the leaden company afloat. Though Pre shows promise with its webOS operating system, the release of this smartphone will probably be too little, too late for what was once the unquestionable king of the PDA hill just a few short years ago. The new device just has too many issues to contend with in order to save Palm.

No. 1: Application Support Stinks

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Palm failed its users right out of the gate with its inability to cement third-party developer partnerships. Just this week the company announced that the highly-anticipated software design kit for webOS, dubbed Mojo, will remain unavailable to the public until the end of the summer.

This means that the majority of third-party developers will be unable to truly provide full menu of apps for up to a year from now. Meanwhile, Apple’s application multiplies daily.

No. 2: Microsoft Exchange Woes

Lackluster Exchange support surely puts the Pre on the wrong heading with the business user crowd. After several weeks on the market, Palm released a firmware upgrade that fixed one of the issues—missing support for non-SSL Exchange servers—but it still has a long way to go to look attractive to IT managers. The major sticking point is the phone’s inability to support Exchange ActiveSync (EAS) policies, including PIN and password enforcement and remote wipe. These glaring security holes will likely go unfixed for 60 days, according to a Palm statement this week.

No. 3: Hardware Hang-Ups

When you release a slider phone, you’d think that the defining feature would work right. But the truth is that many first adopters are reporting issues with the Pre rebooting each time they slide the keyboard into the compact position. Apparently many units are shipping with loose batteries. While there is information out there for a relatively easy hack to shim the battery tight, users expect their brand-new phones to work right without any extra rigging.

Speaking of the battery, early reports also complain about terrible battery life.

No. 4: First Gen Jitters

Palm is so late to the game with its iPod killer that many consumers looking for a device with this class of features just plain gave up on the company and switched loyalties. With a similar price point to the iPod 3GS, Pre will likely be passed up in favor of the more established iPhone by consumers who don’t want to deal with the type of issues that come with the territory of owning a first generation device. Add to that the consumer’s very real concern that Palm could potentially be on the brink of going bye-bye, and it is easy to see how this first gen factor alone could keep Palm from truly carving out respectable market share.

No. 5: Market Flood

The Palm fanboys have been out in force with claims that Pre is Palm’s ‘iPhone killer.’ But, really, Apple is the least of Palm’s worries. The Pre just can’t compete with a lot of iPhone’s consumer-centric features. The aforementioned application support has torpedoed any semblance of a good game catalog, the camera quality stinks, the MP3 player is lackluster compared to iPhone’s native iPod features, and the ability to sync with iTunes was threatened this week by rumblings from Apple that it may not play nice for long.

That leaves Pre to contend with a bevy of competitors within its realistic playing field. With so many formidable foes such as Research in Motion’s BlackBerry devices, Google Android-equipped devices and even Windows Mobile smartphones, Palm faces a really tough market.