What critics were saying about Steve Jobs' smartphone in the months before it launched

Microsoft's Steve Ballmer. Click to play.

Three years ago, when it became clear that Apple (AAPL) was about to unveil some kind of mobile phone, critics began to weigh in on its chances of success. AAPLinvestors' Terry Gregory, building on a list of skeptical quotes begun by MacDailyNews, has put together what may be the definitive collection.

A sample:

“We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.”
Palm CEO Ed Colligan, commenting on then-rumored Apple iPhone, 16 Nov 2006

“Apple is slated to come out with a new phone… And it will largely fail."
Michael Kanellos, CNET, 7 December 2006

"The only question remaining is if, when the iPod phone fails, it will take the iPod with it.”
Bill Ray, The Register, 26 December 2006

"Apple will likely have a tough time convincing application vendors to build specialized clients for the iPhone until the volumes are there, and the volumes could be limited by the lack of third-party applications – a Catch 22.”
Jack Gold, J. Gold Associates, 10 January 2007

“The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks."
Matthew Lynn, Bloomberg, 15 January 2007

"Five hundred dollars? Fully subsidized, with a plan? It is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine… So, I, I kinda look at that and I say, well, I like our strategy. I like it a lot.”
Steve Ballmer, Microsoft CEO, 17 January 2007

I am not sure how it will stand against Sprint’s Wimax (when it successfully launches) and its phones, which I am looking forward much more than over-hyped Apple iPhone.”
Bhaskar Chitraju, Indews Broadcast, 18 January 2007

"iPhone may well become Apple’s next Newton.”
David Haskin, Computerworld, 26 February 2007

“Apple should pull the plug on the iPhone… What Apple risks here is its reputation as a hot company that can do no wrong. If it’s smart it will call the iPhone a ‘reference design’ and pass it to some suckers to build with someone else’s marketing budget. Then it can wash its hands of any marketplace failures… Otherwise I’d advise people to cover their eyes. You are not going to like what you’ll see.”
John C. Dvorak, 28 March 2007

“There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.”
Steve Ballmer, Microsoft CEO, 30 April 2007

“How do they deal with us?”
Ed Zander, Motorola CEO/Chairman 10 May 2007

“Apple begins selling its revolutionary iPhone this summer and it will mark the end of the string of hits for the company.”
Todd Sullivan, Seeking Alpha, 15 May 2007

"What does the iPhone offer that other cell phones do not already offer, or will offer soon? The answer is not very much… Apple’s stated goal of selling 10 million iPhones by the end of 2008 seems ambitious.”
Laura Goldman, LSG Capital, 21 May 2007

“We Predict the iPhone will bomb. Which means that when the iPhone comes, Digg will likely be full of horror stories from the poor saps who camped out at their local AT&T store, only to find their purchase was buggier than a camp cabin.”
Seth Porges, The Futurist, 7 June 2007

“The forthcoming (June 29) release of the Apple iPhone is going to be a bigger marketing flop than Ishtar and Waterworld combined. Because its designers forgot Platt’s First, Last, and Only Law of User Experience Design (“Know Thy User, for He Is Not Thee”), that product is going to crash in flames. Sell your Apple stock now, while the hype’s still hot. You heard it here first.”
David S. Platt, Suckbusters!, 21 June 2007

“God himself could not design a device that could live up to all the hype that the iPhone has gotten.”
Harvard computer science professor David Platt, 25 June 2007

More than 33 million iPhones, 100,000 apps and 2 billion downloads later, the death watch continues. To see AAPLinvestors' full collection — including comparisons to such "iPhone killers" as the Palm (PALM) Pre, Research in Motion's (RIMM) BlackBerry Storm and Motorola's (MOT) Droid — click here.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

The largest smartphone maker you've never heard of wants to capture the hearts – and dollars – of the U.S. consumer.

Motorola's (MOT) Droid phone is getting a ton of buzz, and that’s by design. Verizon Wireless (VZ) chief Marketing Officer John Stratton has said the marketing campaign behind its iPhone competitor will be the largest in its history.

But the Google (GOOG)-powered device isn't the only smartphone the company is likely to begin selling at the start of November. Though no one has officially confirmed, the carrier is expected to announce a second device that will also run on Google's  Android operating system at half the price: the HTC Droid Eris.

Haven’t heard of HTC? You aren't alone.

Since 1997, the Taiwanese smartphone maker has built a business out of creating "white label" devices for companies like T-Mobile (DT) and Palm (PALM) to brand and distribute. It’s been lucrative. After Apple (AAPL) and RIM (RIMM), which together command 73% of the North American market according to IDC, HTC ranks third. That's right: No. 3.

Though it only has 7% of the market, that figure doesn’t tell the whole story. Until recently, HTC simply never put its name on phones it made. (For example, most of the devices represented by T-Mobile, which has six percent of the market, are made by HTC.)

From "white label" to consumer brand

But as the market heats up, HTC wants to be more than a white-label hardware provider. Jason MacKenzie, who runs HTC’s North America operations out of Seattle, calls it a “major shift in strategy.”

So last December, HTC bought the San Francisco-based design firm One & Co, so the designers could work more closely with its engineers. HTC’s latest devices sport the company’s logo. And this fall, HTC made its largest investment ever, pouring millions of dollars into an ad campaign that includes everything from bus stop billboards to prime-time TV spots that tout the slogan “HTC: quietly brilliant.” The first three will go live on October 29.

If HTC hopes to remain competitive in this market, this move is crucial. When the company made its brand debut last year, as the hardware device behind the T-Mobile G1 with Google, it was the only Android device on the market. But within the year, more than 20 Android devices will be go on sale. As is evident with the Motorola Droid, not all of them will get equal marketing treatment by the carriers.

Devices trump carriers

At the same time, consumers’ buying habits are changing. They no longer go to a preferred carrier like AT&T (T) or Verizon Wireless to review different phone models. Instead, they increasingly ask for phones by name, most often requesting an iPhone or a BlackBerry.

So will a “quietly brilliant” phone impress consumers enough to have them seeking out HTC devices over the iPhone? IDC analyst Ramon Llamas is skeptical. “I’ve got to tip my hat to these guys because the devices are very good,” he says. “But branding oneself takes time, you don’t get instant street cred.”

MacKenzie expects to spend time. He says the marketing investment is the first of many to come.

Back to the future: Straight Talk phones like the LG 200C might be dowdy, but growth in the prepaid market could eventually squeeze carrier profits. Photo: LG.

Look out, U.S. wireless carriers: Wal-Mart is teaming up with billionaire Carlos Slim’s América Móvil to train its price-crushing might on cell phones.

In time for the holiday season, the mega-retailer on Wednesday announced a nationwide roll-out of the new prepaid Straight Talk service, offered through América Móvil subsidiary Tracfone Wireless. Unlike mainstream wireless plans that pair cutting-edge phones with higher monthly fees and multi-year contracts, pre-paid services like Straight Talk offer cheaper phones, lower fees and no contracts.

Wal-Mart will offer two Straight Talk options: a $30 monthly plan that comes with 1,000 minutes, 1,000 texts and 30 megabytes of data, and a $45 monthly plan with unlimited voice, texts and data. Straight Talk uses Verizon’s (VZ) wireless network.

The bargain-basement prepaid approach makes sense in a down economy, where consumers are looking for cheaper options and fewer can pass the credit checks that come with traditional phone plans. Prepaid plans have been a hot ticket in this market, which explains why Wal-Mart (WMT) is taking Straight Talk from a year-long pilot in 234 stores to a nationwide, 3,200-store launch.

Why does this matter? It’s not just about price. The all-you-can-eat Straight Talk plan is only $5 per month cheaper than offerings from rival Boost Mobile – plus, the Straight Talk phones aren’t going to impress anyone. The cheapest, the LG 200C, costs $40. The somewhat better looking Motorola’s (MOT) RAZR V3A is $100. Both might have been cool four years ago, but not today.

No, the interesting thing here is the evolution – and proliferation – of prepaid.

With Wal-Mart in the game, the other pre-paid players will feel pressure to offer both lower prices and cooler phones; and with low-cost smartphone software like Android gaining steam, it’s only a matter of time before decent smartphones arrive hit the prepaid market. (Sprint (S) CEO Dan Hesse said as much at Fortune’s Brainstorm Tech conference in July.)

Over time, those cooler phones and no-contract plans could start to lure customers away from mainstream wireless services. That’s good for penny-pinching consumers, but bad for carrier profits.

Verizon, Sybase and Quickcomm team up to manage corporations' mobility needs. Their service just scratches the surface

Chen wants to help your company go mobile. Photo: Sybase

Telecom giant Verizon (VZ) says it is launching a suite of services to help corporate IT departments manage their fleets of mobile devices. Corporate clients can hire Verizon to track their inventories of phones and monitor billings, add and drop devices as employees come and go, enforce security policies on phones and even remotely deliver applications and data to employees' handsets.

Verizon is partnering with software company Sybase (SY) and Quickcomm, which specializes in telecom-expense management, to offer a one-stop shop for companies looking to outsource mobile operations.

Analysts' reports suggest there's a need for such tools: Forrester Research estimates that by 2012 nearly three-fourths of workers worldwide, or nearly 400 million people, will be using mobile devices for work.

But the Verizon offering, which today focuses more on devices and enforcing a company's computer policies on mobile devices, addresses only part of the opportunity.

Mobile apps for enterprises – not as easy as it sounds

A growing number of companies are eager to move desktop applications to mobile devices, and may even want to develop new, custom applications for their businesses that take advantage of mobile networks.

Michael Marcellin, a vice president of product marketing for Verizon Business, says such application management services are under development. The company says it hopes to offer support for enterprise apps in 2010.

Delivering enterprise apps – customized or off-the-shelf – to a diverse global workforce is no easy task: Workers likely will have dozens of different handsets of varying vintages, and if the company operates in multiple countries, workers also will use different carriers' networks.

Adding to the complexity: The vendor of the application in question may or may not have a mobile version of their software. Or they may not be ready to move to delivering the software over the Internet cloud, which is the way many mobile workers want to access their applications.

Sybase CEO John Chen says his company has been working on these issues for some time now, as part of an effort to diversify the database-management company's revenue stream.

A few years ago the company began pursuing enterprise mobility in earnest with mobile device management and delivery of mobile messaging services. "Enterprise mobility opened up a whole new world for us in terms of who we partner with," Chen says. "Companies with big names and big reach are working with us, and it is creating (wireless) franchise value for Sybase."

In addition to Verizon, Chen says, the company has done wireless technology work for companies such as Samsung and Western Union (WU).

Sweet spot: Software cred + mobility experience

Chen says Sybase's experience in the software world coupled with its new focus on wireless makes it an ideal partner for companies seeking to migrate, say, SAP (SAP) solutions to a fleet of smartphones.  (SAP is a Sybase customer and partner.)

Indeed, Chen says his firm will be instrumental in Verizon's move into application management. "We can help them with that next piece, application enablement and launching new apps," he says. "We have shown a commitment to mobility, and we understand the enterprise."

Whether Sybase – and Verizon – succeed (especially in providing high-end application development and enhancement services) very much remains to be seen.

Verizon says the initial offerings from its mobility suite will be available later this month in the U.S and 19 European countries. The service is offered by Verizon Business and  Verizon Wireless, a joint venture with Vodafone (VOD).  But Verizon's Marcellin says the telco is happy to manage wireless operations for clients that have wireless service contracts with rivals AT&T (T), Sprint (S) or T-Mobile.

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.

As it turns out, smartphones are double-edged swords for phone operators. They attract big-spending customers who purchase highly profitable text-messaging and unlimited-data plans.

But they also tax networks designed for simpler times. Now the wireless providers hawking those Internet-enabled mobile devices are experiencing the digital equivalent of being proprietors of an all-you-can-eat buffet: It seems like the perfect business until the sumo wrestlers show up.

No carrier is feeling the pressure more than AT&T, the exclusive U.S. provider of the iPhone. Users of Apple's device are the hungriest mobile Internet consumers of all: Not only do they send e-mail messages and access the web, they also view maps and YouTube videos and download iTunes purchases.

Independent telecom analyst Chetan Sharma estimates that the typical wireless subscriber consumes 120 megabytes each month; typical iPhone owners use four times that.

Accommodating all that data is one challenge for operators such as AT&T, but the real issue with smartphones is that their users are always moving from one location to another, tapping into the network constantly, sometimes for a few seconds, other times for hours on end. And when a big group gathers — the lunch crowd in Manhattan, say, or South by Southwest revelers — the effect can be total gridlock.

"3G networks were not designed effectively for this kind of usage," says John Donovan, AT&T's chief technology officer, referring to the current generation of broadband wireless. "We fight the day-to-day guerrilla warfare as the customers move around." Not that AT&T is complaining. "The iPhone," adds spokesman Mark Siegel, "is a problem that other carriers would love to have."

New data guzzlers
And they soon will — sort of. AT&T is in the hot seat now, but an influx of Internet-savvy phones could easily strain other carriers' networks in the near future. By 2010, global mobile data traffic is expected to exceed 200 terabytes per month, six times last year's levels, according to Cisco Systems.

Why? One reason is that other phonemakers are catching on to the touchscreen craze that made the iPhone a hit. Users of phones with Google's Android operating system spend roughly as much time online as iPhone users, according to mobile advertising company AdMob.

To date, only two devices use the Android platform, including the HTC myTouch 3G launched by T-Mobile (DT) last month. But Android phones from Samsung, LG, and Motorola (MOT) are due in stores by early 2010. The data-oriented Palm Pre, which operates on Palm's (PALM) WebOS platform, is already on Sprint (S) and should be in Verizon stores early next year.

With all the money AT&T and other carriers are making from smartphones, why don't they simply upgrade their existing systems to handle more traffic? Because increasing wireless capacity is like adding lanes to a road; it takes months or years to get local permission to build new transmission towers.

Ultimately all carriers will move to faster next-generation networks that are designed for data traffic. But those so-called 4G systems won't be available nationwide for years.

In the meantime, carriers are likely to get pickier about the applications they'll allow on their networks. When Apple (AAPL) unveiled the latest iPhone software in June, developers collectively groaned after the company revealed that AT&T wouldn't immediately support two of the most exciting (and bandwidth-hungry) new features: MMS, which uses the text-messaging system to send media such as photos and video, and tethering, which allows a phone to share its Internet connection with a nearby computer. (AT&T says MMS will arrive at summer's end, when the network is deemed ready.)

Some carriers may try to offload data traffic. PCCW, the Hong Kong operator, has started using Wi-Fi hot spots to ease the load from smartphones and its digital TV service.

Pricing will probably change too. In private meetings, AT&T CEO Randall Stephenson has said that the most active 5% or so of data users are causing problems for the other 95%. AT&T is working on a revamped data plan whereby light data users would pay less, and heavy users would pay a premium rate — or leave.

A few carriers in Europe already have moved away from unlimited-use data plans. And once one U.S. operator makes the move, it is likely the others will follow suit — and the sumo wrestlers of wireless might have to do without the buffet.

Wireless carriers tout a new wave of wireless technology but it will be years before most consumers benefit — and before carriers make money.

4G Phone: Samsung's Mondi device operates on WiMax networks. Image: Samsung

Verizon Wireless, a joint venture of Verizon (VZ) and Vodafone (VOD), last week announced it had completed data "calls" using its flavor of so-called 4G technology, a new generation of radio upgrades that promises to improve the throughput  and capacity of wireless phone networks.

Rival Sprint Nextel (S) immediately responded with a flurry of news releases touting its 4G network, which uses a competing technical standard.  In proclaiming its ability to deliver peak downlink speeds of 10 Mbps, one release gushed: "At these speeds, Sprint 4G breathes new life into wireless Internet."

Um, wasn't that what 3G was supposed to do?

Okay, that was a little harsh. But some analysts say the wireless carriers and their suppliers are hyping 4G technologies way before the services –and devices–are ready for prime time.

Indeed, many carriers globally still are building out their third-generation networks, and are only now starting to see returns on their investments, which included substantial payments for additional spectrum licenses.

3G all over again?

"Yay, Verizon made a test call on LTE," deadpans Jane Zweig, CEO of the Shosteck Group, a telecommunications consulting firm. LTE stands for Long Term Evolution, and it is the technology Verizon and many other incumbent phone operators are using to transition to yet another generation of broadband networks.

Zweig, whose firm has predicted that global wireless giant Vodafone won't make a return on its 3G investment (including spectrum) until 2013, sees 4G as a replay of 3G: a long, painful slog that will take many years to get up and running–and many more after that to produce financial gains for the carriers.

"Let's replay 3G," she says. "Where are the devices? What is it that people are going to do?  How much is the build out going cost? What's the resturn on investment. Is this a vendor dream or a carrier's nightmare?"

The carriers' 3G experience in the U.S. and abroad certainly offer clues as to how long it will take for 4G to become pervasive (and useful) to consumers.

When carriers started rolling out 3G systems in the early part of the decade–Japan's NTT DoCoMo (DCM) in 2001 became the first operator of a 3G network; Verizon followed two years later as the first major carrier in the U.S. to offer 3G–there was a lot of excitement (ample press releases, white papers and briefings by breathless executives) but not a lot for consumers to do with the network.

Some road warriors procured wireless data cards to hook their laptops up to the new network, but the first wave of 3G phones didn't offer much of a multimedia experience.

If you build it…

A few executives at U.S. wireless operators admitted at the time that 3G mainly allowed them to handle high volumes of voice calls at peak times. Not exactly what the futuristic data network was intended for.

Along came Apple's (AAPL)  iPhone: More than five years after 3G launched in the U.S. consumers finally had a device that showed them the power of mobile broadband networks. (Ironically the first iPhone ran on AT&Ts (T) less robust EDGE network, sometimes referred to as a 2.5G network.)

Other 3G devices started hitting stores, and today there's a real consumer case for 3G: almost a decade after carriers pledged billions of dollars to acquire wireless spectrum and build out networks. And, still, as Zweig and other analysts point out, 3G coverage in the U.S. remains spotty and service problems persist.

Will 4G help? Many operators (and the vendors that hope to sell them expensive new gear) are already touting 4G as the solution to issues of data overload they are now facing as consumers spend a growing amount of time downloading applications and doing heavy-duty computing on their mobile devices.

But as with 3G, fully formed 4G systems–the networks, the devices, the applications–are years away. Telecom executives like to quote the 1989 movie Field of Dreams: "If you build it, they will come." They'll come, alright, just not any time soon.

Douglas L. Gilstrap, newly named head of strategy for Ericsson (ERIC) doesn't start his new gig until Oct 1, but it is pretty clear the U.S.-born Gilstrap aims to push the Swedish telecom equipment maker to do more deals like the $5 billion, seven-year contract it recently inked with Overland Park, Kan.-based Sprint (S).

Gilstrap, a veteran of network operators such as Britain's Cable & Wireless, told Brainstorm Tech he thinks Ericsson has a great opportunity to help phone companies that are trying to manage lots of change: Consumer and business demand for broadband capacity continues to grow; meanwhile, operators are trying to migrate their networks to systems based on Internet Protocols and integrate and update networks they acquired over the years. The phone carriers also are looking for ways to keep their costs down.

Enter Ericsson, which has built a sizable business essentially taking over operations for wireless operators around the world. In many cases Ericsson pretty much runs the networks — including planning and executing major upgrades and managing the employees (putting them on the Ericsson payroll) — and the carriers simply handle retailing, marketing and customer relations. Many international carriers, including India's Bharti Airtel and Hutchison Whampoa's Three Italia, outsource their network operations.

"This is just great for Ericsson," Gilstrap says. "The operators don’t have the people anymore for the 'bubble' they're facing. Ericsson's got the people, it has the global coverage. I looked at all that and I said, this is a fantastic company to join."

But no major U.S. carrier has embraced the outsourcing model — until now. Sprint in July announced a deal in which Ericsson would assume responsibility for the carrier's day-to-day services, including provisioning and maintenance for Sprint-owned networks. Some 6,000 Sprint employees will be transferred to a new unit called Ericsson Services Inc., a wholly-owned Ericsson subsidiary based in Overland Park. And while Sprint executives have been careful to brand the deal a "service agreement," there's little question it is hiring Ericsson to run its network.

"Sprint doesn’t want to call it outsourcing," says Rich Nespola, CEO of TMNG Global (TMNG), a technology management and consulting firm. "They'll call it 'network collaboration,' or use some other parlance, but a rose by any other name…"

Sprint, of course, is struggling to hold on to customers and make money. In the second quarter of this year the country's No. 3 wireless provider posted a loss of $384 million and lost 257,000 net subscribers. So it is looking for fresh ways to cut costs.  But Nespola believes other U.S. carriers, especially smaller, independent operators, may follow suit.

And what about AT&T (T) and Verizon (VZ)? Don't look for the No.1 and No. 2 operators to embrace the outsourcing model any time soon. Executives of both companies privately tell Brainstorm Tech that they think giving up network operations would mean ceding their competitive edge.

How did Palm's (PALM) Pre do in its first weekend of sales?

In a report to clients issued Monday morning, RBC Capital's Mike Abramsky offers some numbers.

Based on his "channel checks" — presumably a survey of Sprint (S) and Best Buy (BBY) retail stores — Abramsky estimates that Palm sold somewhere between 45,000 and 55,000 Pres last weekend ,and put another 10,000 to 15,000 would-be customers on waiting lists.

Apple (AAPL) and AT&T (T), by contrast, sold 270,000 iPhones in that device's first two days of sale (Friday and Saturday, June 29 and 30, 2007).

A year later Apple sold 1 million iPhone 3Gs in less than three days — although analysts estimate that more than half of those sales were in overseas markets.

Palm's sales were limited to U.S. retail outlets and were severely constrained by short supplies. Store representatives told Abramsky that their initial inventories ranged from 5 units to 80+ (average: 25-45 per store), which sold out within the first one to three hours.

The reps were not at all certain when more supplies would be coming in, although most expected to get them "sometime next week."

Among Abramsky's other findings:

• An estimated 80-90% of early Pre buyers were Sprint customers, some upgrading from flip phones, others from HTC smartphones or Research in Motion (RIMM) BlackBerries
• An estimated 60% had previously owned Palm devices
• The features that attracted customers to the Pre included "its sleek [user interface], Web browser, physical keyboard, multitasking, and side-loading with iTunes"
• Battery life and limited apps (shortcomings highlighted in early Pre reviews) did not seem to deter early buyers.

Abramsky believes Palm is on track to sell 470,000 Pres in its first quarter and 2.6 million units in its first year.

"Forward catalysts for [share] growth and valuation," he writes in analyst's telegraphese, "include distribution expansion, additional product launches, visibility to breakeven, and smartphone market growth…

"Valuation could be near-term volatile on: a) competitive launches from Apple, RIM, Android; b) possible litigation concerns; c) launch or subsequent execution issues (e.g. shortages, quality, support, etc); d) speculation over future carrier launches."

Abramsky is sticking with his "outperform" rating for Palm and a $14 price target. Shares closed Friday at an even $13.

See also:

• The Pre’s soggy debut – Updated
• The Palm Pre takes Manhattan
• Palm Pre launch plans leaked
• Apple vs. Palm: Geeks with grudges

There were eleven customers huddled under umbrellas in a steady rain when the doors to Sprint's (S) flagship store in Manhattan's Greenwich Village opened at 6 p.m. ET Friday night — the worldwide retail debut of this week's hottest smartphone.

First in line was Alfredo Rodriguez, 37, a hospital building services employee from the Flatbush section of Brooklyn. He had been a Sprint customer for a year and a half and was ready to trade his HTC Diamond for a Palm (PALM) Pre.

The tech press has been obsessed with the Pre since it was unveiled in January at the Consumer Electronics Show in Las Vegas, where it was showered with plaudits and awards, including Best in Show. Built by a team headed by Jon Rubinstein — once one of Steve Jobs' closest advisers — it was seen as the worthiest competitor yet to the Apple (AAPL) iPhone.

But in the weeks before its debut, Palm's PR team sought to lower expectations, telling the press not to expect the hysterical employees and snaking lines that have accompanied the launch of every iPhone to date.

Alfredo Rodriguez only had to wait an hour to get his Pre. He arrived at 5 p.m. and when the doors opened he was swiftly ushered to a sales booth, where he was persuaded to buy two add-ons, a case and a wireless charger.

Palm's day in the sun — or rather the rain — may not last long. Apple is expected to announce a new iPhone some time before the end of June. Perhaps as early as Monday.

UPDATE: When we checked back Saturday morning at 9:30 a.m., there were 19 people in line and 10 customers inside buying phones. The store had opened at 8 a.m., two hours early, with roughly 20 people queued up to buy Pres, according to a customer who said he arrived at 8 sharp.

Reports from around the country suggest that this level of demand — steady, but relatively modest –  was fairly typical on Saturday, the Pre's first full day of sales.

See also:

• The Palm Pre takes Manhattan
• Palm Pre launch plans leaked
• Apple vs. Palm: Geeks with grudges

The first wave of reviews for Palm's (PALM) Pre came in overnight Thursday from the usual suspects — and they're generally positive, with caveats.

The early reviews cover the basics and make the expected comparisons to Apple's (AAPL) iPhone and Research in Motion's (RIMM) BlackBerry.

The most in-depth piece we've read is Joshua Topolsky's at Engadget. For sheer length, Dieter Bohn's 20-part epic at PreCentral.net takes the prize.

A sampler:

• Walt Mossberg, Wall Street Journal: "I’ve been testing the Pre for a couple of weeks, and I like it a lot, despite some important drawbacks that will have to be remedied…. I consider the Pre to be potentially the strongest rival to the iPhone to date, provided it attracts lots of third-party apps, which it sorely lacks at launch. Its design is much better than that of the two other main iPhone-class competitors: the T-Mobile G1, which uses Android, and RIM’s touch-screen BlackBerry Storm."
• David Pogue, New York Times: "The Pre has the usual feature checklist: Wi-Fi, GPS, 3G (high-speed Internet), Bluetooth (including wireless audio), good camera with tiny flash, ambient light sensor, proximity sensor, tilt sensor, standard headphone jack, 3.1-inch touch screen (the same 320 x 480 pixels as the iPhone, packed into less space). The hard part is making it all feel simple and unified –  over all, Palm nailed it…. So do the Pre’s perks (beautiful hardware and software, compact size, keyboard, swappable battery, flash, multitasking, calendar consolidation) outweigh its weak spots (battery life, occasional sluggishness, ringer volume)? Oh, yes indeedy."
• Edward C. Baig, USA Today: "Pre is easy on the eyes. I can't think of a more comfortable cellphone in my hand. It has a lovely screen for taking in YouTube videos or browsing the Web. The "always-connected" software foundation at its core, which Palm designed from scratch and calls WebOS, is slick and rife with possibilities."
• Joshua Topolsky, Engadget: "The keyboard has been a subject of tremendous debate. Well, we can put your mind at ease folks — it's actually pretty good. Now, we won't lie, it's not quite the barnstormer of the Bold or Treo 650, but it is a very, very solid typing experience nonetheless. The keys — made of a similar rubbery material which the Treo Pro and Centros use — have a surprising amount of depth given their location, and they're actually somewhat clicky (a surprise to us). Spacing between keys is ample, but we wouldn't say generous — though in general getting accustomed to typing on the Pre wasn't too painful."

UPDATE: The second wave of reviews include:

• Michael V. Copeland and Jon Fortt, Fortune
• Josh Quittner, Time
• Steve Levy, Wired

• Stephen H. Wildstrom, BusinessWeek
• Sinead Carew, Reuters
• Peter Svensson, AP
• Jason Chen, Gizmodo
• Ginny Mies, PC World
• Ryan Kairer, Palm Infocenter
• Bonnie Cha, CNET

And don't miss Gizmodo's clever Palm Pre Review Matrix.

The Pre goes on sale Saturday for $199 after a $100 rebate. Sprint's (S) two-year voice and data contracts range from $69.99 to $99.99.

See also:

• Palm Pre launch plans leaked
• Scooplet: the Palm Pre syncs with iTunes
• Apple vs. Palm: Geeks with grudges