Palm Inc.’s new touchscreen smartphone, featuring the company’s long awaited Nova operating system, should be unveiled later this week and aims to attract users looking for an app-loaded consumer phone that also doubles as a business device.

The company is expected to officially launch the Linux-based mobile OS at the Consumer Electronics Show (CES) 2009, which kicks off Thursday in Las Vegas. Palm is also rumoured to be showcasing the OS on a brand new device, which will reportedly feature a large iPhone-like touchscreen and a slide-down QWERTY keyboard.

But while the market might be big enough to welcome yet another mobile OS, some industry analysts argue the developer community will not be as accommodating.

“The biggest challenge [for Palm] is how to address the developers,” Ryan Reith, senior research analyst at IDC Corp., said. “Clearly, we’ve seen the secrets to success moving forward for these high-level operating systems and it’s around the developer following.”

But according to Rob Enderle, principal analyst at San Jose, Calif.-based The Enderle Group, most developers have already placed their bets in the mobile OS sweepstakes. Microsoft Corp., Google Inc. and Apple Inc. already have huge mobile development communities attached to their respective platforms, he said, which could leave Palm left out in the cold.

“Developers are spread really thin as it is and in the current economic situation they have to pick which platform is going to generate money for their work,” he said. “It’s hard to get money out of a platform that has just started shipping, compared to something like the iPhone, where there are enough phones out there already to live on.”

And with more Android-based devices sure to be on the horizon later this year, Reith said Google’s development community will likely attract a lot of attention as well.

Ken Dulaney, a mobile and wireless analyst with Gartner Inc., agreed, saying that barring any surprises with Nova’s announcement, Palm is going to have a lot of trouble attracting talent.

“Why would a developer want to write for a proprietary OS that is backed by a hardware manufacturer who has had serious difficulties?” he asked. “If it was licensed then OK, but if it’s proprietary, I think it’s a bad move on Palm’s part. They should have licensed Android.”

“It’s one thing to be proprietary when it’s Apple or RIM, but not Palm,” Dulaney added.

The biggest upside for Palm, according to Enderle, is last month’s much needed US$100-million equity investment from Elevation Partners, a venture capital firm co-founded by U2 lead singer Bono.

“I bet you Palm uses a chunk of that money to fund some of the development on this project,” he said. But, he admitted, that getting developers onboard with the project will probably eat away at that war chest fairly quickly.

And according to most industry watchers – and perhaps even Palm itself – one thing that the company doesn’t have on its side right now is time.

“This really has to be a hit and is probably their last and best chance to be relevant again,” Enderle said. “If they miss here, the odds of a comeback get a lot worse. I think Palm understands how important this is to them.”

As for how Palm intends to become relevant again in the smartphone market, much of the talk coming out of the company’s Sunnyvale, Calif.-based headquarters appears to be around going after the “middle market” user.

In an interview with BusinessWeek last month, Jon Rubinstein, Palm’s executive chairman of product development, described the upcoming Palm devices as “products that bridge the gap between RIM’s BlackBerry devices, oriented to work and e-mail, and Apple’s iPhone, oriented to fun.”

Rubinstein, who led the development on the iMac and iPod products and was a key player in the company’s turnaround, added that Palm needs to find its niche by creating a mobile Internet device aimed at tackling the ongoing transition of “notebook to mobile computing.”

Reith said that Nova’s quest to bridge the gap between the RIM and Apple platforms will be a lofty challenge simply because there isn’t much of a gap left.

“Clearly RIM made huge strides to go more towards the consumer play and we’ve already seen Apple go upstream toward the enterprise,” he said.

And one of the most crucial aspects of Thursday’s announcement, according to Reith, could be how Palm plans to address enterprise support and whether or not the company will incorporate any partnerships into the OS.

“Will Palm come out with this OS and partner with Microsoft for Exchange support?” he asked. “That would probably be the smartest route for the enterprise, but again that costs money too.”

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