How Centro reinvigorated (and maybe reinvented) Palm

Don't look now, but Palm is making a comeback. The device maker ended 2007 on the ropes: After announcing in April plans to introduce a Linux-based mobile OS prior to year's end, Palm admitted in September that its first Linux smartphone was still 12 to 18 months from retail release, forcing the company to continue leaning on its Windows Mobile license in the meantime. The news got worse in mid-December: Following fiscal second quarter revenues some $30 million lower than forecasted, Palm said it would lay off more than 100 employees, roughly 10 percent of its global workforce. The blame fell in large part on shipping delays plaguing an unspecified Palm product, reportedly its Treo 755p device, finally issued by Verizon Wireless just days prior to the staff cuts.

Almost lost in the shuffle was Sprint's October 2007 introduction of Palm's Centro smart device, the first new Treo design issued in the U.S. market in several years and the smallest Palm smartphone to date. But now the device--featuring voice, text, IM, email, web, contact and calendar capabilities as well as a full-color touch screen and full keyboard--has proven to be an unexpected hit with users, and with Sprint's three-month exclusivity period drawing to a close, Palm is now in talks to launch the Centro via rival operators. According to Seeking Alpha, Palm is close to a deal with AT&T, adding that Palm CFO Andy Brown "giggled a little" when asked if an agreement with T-Mobile is in the works as well. The assumption is that Verizon Wireless is steering clear of the Centro following the extended delays that hampered the launch of the Treo 755p…but no one's giggling about that.

If nothing else, the Centro's initial success proves the Palm brand still carries some weight among U.S. wireless subscribers. But Seeking Alpha suggests Palm is poised to make further inroads into the consumer market, citing Brown's excitement over a new user interface and new application suite currently in development. Word is the Centro also heralds Palm's increasing willingness to experiment with the look and feel of new devices in an effort to distinguish its product line from Apple's iPhone and RIM's BlackBerry. The endgame seems to hinge on devices that simplify the user experience, with an emphasis on multimedia and entertainment--in short, smartphones that are lighter, cheaper and easier to use than Windows and Symbian devices. Maybe Palm will have the last laugh after all. -Jason