Palm Pixi

The clearest indication at whom Palm is aiming its newest smartphone, dubbed Pixi, is the new Facebook application that debuts in the younger, smaller sibling to the Palm Pre. If that is your thing, then perhaps your gadget has arrived.

At a meeting in San Francisco Tuesday afternoon, Palm chairman and CEO Jon Rubinstein kept the Pixi half hidden in the black and orange slipcover that comes with the Pre. The top half of Pixi looks a lot like its older sibling, but when Rubinstein performed the full monty as it were, the device revealed itself as a candy bar-type phone that echoes the Pre’s styling without the slide-out keyboard.

Matte black, with the same sticky keys as the Pre, the Pixi is noticeably thinner and a tad smaller than Pre. Slick was my first impression, and still is. When I put my Blackberry Bold down on the table, it looked chunky by comparison. Rubinstein didn’t noticeably gloat, but pointed out that Pixi is more than 10% thinner than Apple’s iPhone 3GS, and 20% more svelte than any Blackberry device (there is a reason that Pixi is launching at New York’s Fashion Week after all). More

The way consumers use Apple's mobile phone (i.e., constantly) means big headaches for carrier AT&T. And more smartphones are on the way.

Randall Stephenson, chairman, CEO, and president of AT&T, holds up his Apple iPhone

At the South by Southwest music, film, and interactive fest in Texas earlier this year, the iPhone was all the rage — and not in a good way.

The device proved so popular with Internet-addicted attendees that AT&T's wireless network in the city of Austin buckled under the strain, all but shutting down both voice and data service for many customers.

iPhone users bashed the phone company on Twitter and in blogs, and AT&T (T) had to haul in extra network equipment just to ease the gridlock. More

Images: Apple Inc., RIM

In a report to clients Tuesday, RBC Capital's Mike Abramsky takes a long (92 page) look at the "huge, nascent and underpenetrated" smartphone market and concludes that the emergence of devices like the BlackBerry and iPhone represents the next wave of computing — "as profound as the historic technology shift from mainframes to PCs."

Among his predictions:

• Smartphone penetration is likely to grow three fold over the next three years, to 504 million users in 2012 from an estimated 165 million in 2009. That's a 35% increase from his previous estimate of 395 million smartphones by 2012.
• Unlike the PC revolution, which was dominated by horizontally integrated platforms like Microsoft's (MSFT) DOS and Windows, the spoils of this one are likely to go to vertically integrated smartphone makers through the “special sauce” they employ to create unique, iconic user experiences.
• The most successful challengers — he singles out Research in Motion (RIMM), Apple (AAPL) and with less certainty, Palm (PALM) — could double or triple their revenues by 2012.

Almost as an afterthought, Abramsky raises his price targets: RIM to $150 from $100; Apple to $250 from $190; Palm to $25 from $18.

But the real value of the report may be in the rich collection of charts showing the scale of the potential market, the rate at which Abramsky expects it to grow and who he expects the winners and losers to be.

A sampling below the fold:

More

Warren East, chief executive of ARM, holds up an HTC Touch Diamond2

It's 9:30 A.M. on a Friday in Cambridge, England, and ARM CEO Warren East looks annoyed. Bloomberg has just reported that UBS has downgraded his company's stock to a sell. The news is plausible, since ARM (which used to stand for Advanced RISC Machine) depends on the troubled cellphone market. But it turns out that Bloomberg simply got the wrong ARM. "They confused us with a South African mining company" — African Rainbow Materials — East explains.

This sort of thing happens all the time to ARM (ARMH), a microchip designer with $546 million in revenue last year. Nestled in this leafy college town an hour from London — and 5,000 miles from Silicon Valley — it's easy to overlook. But ARM may be the most important technology company no one has heard of. Its low-power chip designs serve as the brains of 98% of the world's cellphones. And the company's technology can be found in myriad other gadgets and devices, including digital TVs, iPods, videogames, video recorders, and even Pleo robotic dinosaurs. More

Apple's iPhone is the star in a series of charts published Tuesday by Needham & Co. analyst Charles Wolf.

The first is a quarter-by-quarter snapshot of the worldwide smartphone market that shows a sharp uptick in Apple's (AAPL) share set against the downward drift of its major competitors — Nokia's (NOK) Symbian, RIM's (RIMM) BlackBerry and Microsoft's (MSFT) Windows Mobile.

The second chart shows the same data without Symbian — which lets you zero in on the competition between the iPhone, BlackBerry and Windows Mobile. In this chart, the rise in Apple's market share after the July release of the iPhone 3G looks positively meteoric.

The third chart shows the battle for the U.S. smartphone market, which is shaping up as a two-way race with the iPhone closing in on BlackBerry and Palm (PALM) and Microsoft Windows falling ever further behind. Note that Apple more than tripled its market share in the third quarter to grab 30% of the domestic smartphone business, while RIM lost considerable momentum and most of its lead. According to Wolf, the seven million iPhones Apple shipped in the September quarter accounted for all the growth in smartphone shipments that quarter — and then some. See AppleInsider here.

Do smartphones really need physical keys?

The folks who designed Apple's iPhone bet that touchscreen keys would be good enough for most users, and based on a February survey of iPhone owners that found 72% "very satisfied" (versus 55% for RIM), Apple's gamble seems to have paid off.

The complaints about the virtual keys that were so persistent when the iPhone first came out have largely gone away.

But not quite. Just as Apple (AAPL) begins manufacturing the second coming of its famous smartphone, we have two new data points suggesting that the keyboard wars are far from over.

The first comes from an open letter to Steve Jobs posted by Dan Tynan at PC World in which he lists "5 Things iPhone 2.0 Must Have." No. 1 on his list: "Enlarge the Friggin' Keyboard." (link)

Tynan cites an Aug. 2007 User Centric test in which 20 veteran thumb typists were confronted with the iPhone for the first time and, not surprisingly, took twice as long to enter text and made more errors. (link)

What does Tynan suggest that Apple do about that? He likes the slide-out keyboard that HTC built for AT&T's (T) Tilt, a solution he describes as "nifty."

Given how hard Steve Jobs and his team worked to design the iPhone — stripping it down to bare essentials and selecting a form factor with as few moving parts as possible — they are unlikely to take kindly to Tynan's suggestion.

The second data point comes from Engadget, which has released what it says are the first leaked photographs of the new RIM (RIMM) BlackBerry 9000. (See their gallery of photos here.) SteveJack at MacDailyNews was the first to point out the resemblance to — and the key difference with — the iPhone. He writes:

"RIM clearly seems to have tried to copy Apple's iPhone's exterior look, but beyond that derivative bit of attempted tomfoolery, the anachronistic physical buttons remain, taking up space whether or not they're in use.

Also remaining is the small screen, mashed into the upper half of the device in order to make room for those tiny, slippery-looking plastic buttons festooned all over the bottom half of the device. The software's UI has been prettied or messed up (depending on your taste), but it has none of the multi-touch goodness of Apple's iPhone. It's the same old, same old in an iPhone-inspired wrapper.

You can judge the distance behind and overall cluelessness of iPhone's future roadkill by the amount they copy the iPhone's exterior. See: LG, HTC, and now RIM, among many others. This ceaseless quest to dress up antiques in Apple veneer is pathetic and sad."(link)

A partisan review, to be sure, and more than a bit over the top. But he may have a point.