Palm “Nova” OS Hits CES in Jan: Too Little Too Late for Palm?

Is it too late for Palm to pull one last trick from its hat? The last couple of years have been particularly bleak for handset maker Palm, the early leader in the smartphone market that fell from grace and lost momentum to rivals RIM and Apple. For Palm, failed product launches, shrinking market share, plummeting stock prices and staff cuts have all contributed to its slow demise. However, Palm’s not throwing in the towel just yet: It has been six years since the company’s last handheld OS refresh, but Palm will reportedly be showing off its next generation OS, unofficially dubbed “Nova,” along with a new device, in Vegas at the Consumer Electronics Show (CES) on January 8.

But will this prove to be Palm’s last hurrah?

The company sure doesn’t think so. According to Jon Rubenstein, Palm’s executive chairman in charge of product development, who spoke with BusinessWeek.com on the subject, there are three good reasons why Palm’s still in it for the long haul: 1) Palm is a highly recognizable brand; 2) it has close ties with wireless carriers; and 3) it has a history of making cutting-edge products like the Palm Pilot PDA and Treo smartphone.

Rubenstein says Palm latest strategy hinges upon making products that cater to the audience that falls through the cracks between Research In Motion’s business-oriented BlackBerry and Apple’s consumer-minded iPhone. In his words, Palm’s aiming for the “fat middle of the market.”

Frankly, this all sounds like marketing-speak to me. Sure, Palm is a recognizable brand name; it was once an industry leader. But contrary to popular belief, consumers aren’t stupid, and they now associate the Palm brand with the company’s stagnant product line. So brand recognition may not be such a good thing in this case.

Also, Palm may have close ties to wireless carriers, but it’s all about dollar signs when the hammer drops, and as such, those very same carriers will likely be hesitant to embrace an additional software platform—and the associated costs—until they’re sure customers will do the same.

As for Palm’s track record of releasing successful devices like the Pilot PDA, and both the Treo and Centro smartphones, this is also the same company that unveiled, hyped-up and then abruptly killed the Foleo, a smartphone companion product. So the company’s track record’s not exactly spotless.

Finally, Palm’s strategy as described by Rubenstein isn’t particularly impressive either. Especially since both RIM and Apple are, in effect, attempting to bridge the very same gaps. RIM, originally a purely business-oriented company, has recently release a variety of devices for business users (the Bold), multimedia-centric consumers (the Storm) and everything in between (82xx Flip, Curve 89xx and so on).

Apple, too, has broadened the appeal of its consumer-centric, first-generation iPhone, making it more business-friendly through improved Microsoft Exchange support.

Bottom line: Nova and the accompanying device had better be damn special, because Palm’s not only competing with RIM, Apple, Nokia, HTC, Motorola and the other handset heavies at this point, it’s competing for public hearts and minds. If the company doesn’t wow us with this next operating system, I think it’s safe to say goodbye to Palm, at least as we know it—for good.

Regardless, I’ll be in Vegas next month for the show, and getting my hands on a Nova-powered device is atop my list of priorities. I’ll be sure to report my findings, good and bad, right here in the Mobile WorkHorse blog.

AS