Palm has had some financial problems lately, with its legacy mobile phones registering weaker demand on the market, which is why it sees Pre like a device that should help it push its business forward. Yet, in order to do so, Pre must prove itself quite success on the market, especially in front of Apple's iPhone, which it might not leave so far behind as originally predicted.

The handset is slated for launch sometime in the second quarter of the year, and it should be able to easily outpace the features that the iPhone currently has to offer under its OS 2.0. Not long after Pre's launch, if not in the same time frame, Apple will also bring on the market its iPhone OS 3.0, which has already been announced recently, and which is meant to narrow the gap between iPhone and Pre's capabilities.

Apple's move might mess up a little with Palm's plans, as the company will have only a few cards left up its sleeve to play against the leading rival. “The issue now for Palm is that it has a narrow window to get the Pre into the market before the iPhone 3.0 software and hardware comes out,” says Lawrence Harris, an analyst with C L King & Associates, “if they want to avoid head-on comparisons.”

When announced back in January, Pre showed to the world a lot of capabilities that were still unavailable with the iPhone, including copy and paste functionality, a removable battery, integrated contacts and universal search, as well as the capability to run multiple applications at the same time. In addition, the handset also included both a touchscreen and a physical keyboard in the same package, something that the iPhone lacks as well.

Some of the differences between the two devices are expected to disappear as soon as iPhone OS 3.0 will become available, as it is reported to pack multimedia messaging or copy and paste, as well as a global search feature, Spotlight, which should offer users the possibility to search content from various apps from a single interface.

Undoubtedly, Pre will still include some features that iPhone OS 3.0 won't be able to bring, such as an integrated contact database, which is able to gather contact detail photos and status info from different sites like Facebook, Gmail, and Exchange. At the same time, Pre also features multitasking, as well as backgrounding, something that the iPhone tries to address through a push notification service.

For the time being, Palm still has to prove that its upcoming Pre handset is able to take the crown away from iPhone. “It is critical that Palm successfully execute the introduction of the Pre,” says Harris. “Its operating system, webOS, is completely new and Palm has had problems in the past obtaining timely carrier certification.”