Palm's Pre May Already Be Old News

By letting a new model leak, Palm may be shooting itself in the smartphone

By Scott Budman
|  Wednesday, Jun 10, 2009  |  Updated 2:14 PM PDT
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Palm Pre Sells Out in Hours

AP

The Palm Pre smartphone .. already a second-class citizen?

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Palm Pre Sells Out in Hours

Sales of the Palm Pre could cause Steve Jobs to come off medical leave early.

Palm Pre Sells Out in Hours

Sales of the Palm Pre could cause Steve Jobs to come off medical leave early.
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The Palm Pre is hot. It sold out the first day it went on sale last weekend. It's given techies (and jealous Sprint users) an alternative to the Apple iPhone.  Well done, Palm. I've played with the Pre myself, and am very impressed.  It's a genuine hit.

But is Palm messing with success? 

The Web is already heavy with rumors about Palm's next phone, called (at least for now) Eos.  While not a touch-screen Pre-like phone, it is said to be the next of its kind of take advantage of Palm's new WebOS, a software platform which outperforms the iPhone in some key ways that make it friendly to social-networking addicts and heavy communicators.  Perhaps more importantly, it's also said to be available on AT&T. 

Did Palm not get the "Osborne" memo?

Osborne, an early computer maker, is one of the great cautionary tales in the technology industry.  It's the quintessential story of a company that got ahead of itself:  Osborne released its first computer in 1981 to good reviews and strong sales. Its second computer was hyped before it was ready, and sales of its first model plummeted.  Osborne filed for bankruptcy in 1983.

Palm's finances were already perilous. Elevation Partners, a private equity firm backed by U2 frontman Bono and some Valley veterans, essentially bailed it out in recent years. It needs the Pre to do well. With Apple discounting its basic iPhone to $99, it's clear that the smartphone wars are to be fought on several battlefields at the same time.  Which is good for us consumers.  But with all the attention placed on the Pre right now, and with Sprint and Palm (finally) having a hit on its hands, couldn't Palm put a lid on the Eos for a little while longer?

Scott Budman, a technology reporter for NBC Bay Area, knows about the dangers of social-networking addiction. Follow him on Twitter: @scottbudman.

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