Palm’s long awaited responce to it’s rapidly disappearing market was finally released at CES. If you have not yet seen the details of the Pre listen to #442, or check out the Engadget wrap-up of the product.

The product itself looks pretty good. I think the smaller size is attractive without compromising the viewing space, and having a fast OS is essential. I am not confident that this will be the product to recapture market share for Palm, and not just because the name is a little tacky and derivative.

Palm is late to the market. Blackberry and HP did much to move the PDA market to the smartphone before Apple’s entry heated the market white hot. Since then Apple has released a second generation phone, RIM has produced a response product, the first Android phone has been released and all the traditional mobile phone companies have released some form of competing product.

While there is space for a good alternative phone to carve out a small niche for itself, Palm cannot afford to be that company. It is too large to survive as a niche player in this market, and they do not have a suite of other products to support them. In order to save their company they need this product to be a big player, prefferably top 3 in this market.

While the product seems at this stage to be good enough to compete, most of the potential customers have already purchased a phone from one of their competitors. For them to catch the amount of market they needed, the Pre needed to not just be good enough to compete, it needed to have something bigger and better, and it does not have that. Typically if you are late to market you need to be either perceptibly better or significantly cheaper if you want to get market share and the Pre is neither of these.

I am also concerned with their decision to also include a new operating system. The decision was probably made quite some time ago, and changing tack mid stream would have delayed the product even further. Unfortunately for Palm now though, to get the same applications as their competitors they will need to develop them in house or bribe companies to make Palm versions. While it does give them better control over the product features they may have been able to make the splash they needed if they had made it an Android phone. Or they could have teamed with the other laggard in this market and used the Windows OS. Palm have previously had both PalmOS and Windows versions of their PDAs on the market, so maybe this is something we will see later in the year.

The feature that has my interest the most though is the Synergy information correlation engine which pulls together information from the different applications on the phone that it finds it can link, like linkin your contact, facebook friend and gmail details for your friends. This is the type of feature that would make a lot of difference to me. This is unlikely to create the sort of strategic advantage they need as it software and too easy for their competitors to copy quickly.