Palm's future may lie in webOS, not Pre


Palm’s new Pre smartphone has potential for robust sales growth and may have a major influence on other platforms as well as the technology supply chain.
Palm Pre shipments could amount to 1.1 million units in 2009. However, if Palm quickly introduces a new Pre that supports the 3G GSM standard, sales could rise to 1.3 million during the year. Furthermore, if Palm opens up the licensing of its webOS operating system used in the Pre, the software could have a wider influence beyond the company’s own products.
Palm’s webOS appears to be superior to the Mac OS X used in the iPhone in the crucial area of multitasking capabilities.
This key point of differentiation, combined with the product’s multi-touch display, could be enough for Palm to carve out a significant share of the smartphone market.
Another key allure of webOS is its use of widgets for accessing data and applications like the iPhone, rather than the folders used in Microsoft’s Windows OS. The consensus among most users appears to be that widgets provide a more intuitive interface than folders. Because of this, there may be strong demand for webOS from other smart-phone makers.
If Palm decides to license webOS to other companies, it could follow in the footsteps of Google’s Android operating system, which is expected to expand its share of global smart phone operating systems to grow by nearly a factor of 12 from 2008 to 2010 according to our Design Forecast Tool (DFT)™ for Mobile Handsets.
This could lay the foundation for webOS to challenge Apple’s Mac OS X for leadership in the highly intuitive smart-phone operating system market.
Palm could further boost the prospects of webOS if the company opens an application store that sells programs that work with the operating system, similar to Apple’s App Store.
An application store would make Palm a more complete solution provider to its end customers, allowing it to provide not only a hardware platform and operating system but also the programs essential to take advantage of the capabilities of a smart phone," Teng said.
Industry rumors have circulated since the Consumer Electronics Show (CES) in January that Palm will offer an online applications catalog.
The potential long-term success of the Pre also promises to benefit Palm’s applications-processor semiconductor supplier, Texas Instruments Inc. (TI).
While TI in 2008 remained the leading supplier of standalone media/application/graphic processing chips for mobile handsets, No. 2 Samsung Electronics Co Ltd. is closing in on the lead, according to iSuppli’s Wireless Competitive Landscaping Tool (CLT). Samsung’s share of global market revenue rose to 16.4% in 2008, up from 10 percent in 2007. In contrast, TI’s share declined to 16.8% in 2008, down from 23% in 2007.
Tina Teng, senior analyst wireless communications, iSuppli