Will Palm Pre shake-up smart phone status quo?

6 Jun 2009

It took the Apple iPhone to show everyone else the way to go, but it now seems imitation is the best form of flattery and there’s no shortage of iPhone clones out there. Will the Palm Pre change things?

According to tech analyst iSuppli, the Palm Pre – upon which Palm is placing a lot of hope to reverse its flagging fortunes – holds strong potential for robust sales growth, and may have a major influence on other platforms, as well as the technology supply chain.

So, it seems iPhone cloning could give way to Palm Pre pretending.

iSuppli reckons 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.

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 multi-tasking capabilities,” said Tina Teng, senior analyst, wireless communications, iSuppli.

“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 such as 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 the Pre’s webOS from other smartphone 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 smartphone operating systems to grow by nearly a factor of 12 from 2008 to 2010, according to iSuppli’s Design Forecast Tool (DFT)™ for Mobile Handsets,” Teng added.

This could lay the foundation for Palm’s webOS to challenge Apple’s Mac OS X for leadership in the highly intuitive smartphone 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 OS, 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 OS, but also the programs essential to take advantage of the capabilities of a smartphone,” Teng said.

She also noted industry rumours have been in circulation since the Consumer Electronics Show (CES) in January that Palm will offer an online applications catalogue. With the arrival of software allowing developers to produce programs that can be compiled to work on multiple mobile operating systems, Palm’s store likely will grow rapidly to sport a large number of applications.

The potential long-term success of the Pre 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, at 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 16.4pc in 2008, up from 10pc in 2007. In contrast, TI’s share declined to 16.8pc in 2008, down from 23pc in 2007.

“Owing to rising shipments of the iPhone, which uses Samsung’s media processing silicon, the company is closing the gap,” said Francis Sideco, senior analyst, wireless communications, iSuppli.

“Pre’s success could help TI regain some of that share, as Pre sales will help boost TI’s revenue for its Open Multimedia Application Platform (OMAP) line. It will also validate TI’s OMAP approach by demonstrating the need for powerful standalone applications processors in high-end smartphone devices.”

The Pre will likely make use of a Low-Temperature Polysilicon (LTPS) LCD display, which offers superior picture quality compared to regular TFT-LCD panels used in most mobile phones.

This could put constraints on availability of LTPS LCD supplies, which is a popular display choice in the growing smartphone marker segment.

“If the Pre is successful and large volumes are shipped in the coming years, LTPS displays could go into shortage because the supply is limited to a few suppliers that operate smaller generation fabs capable of producing them,” said Vinita Jakhanwal, principal analyst, small/medium displays, iSuppli.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years