Can the Pixi Save Palm?

This New York Times article paints a dire picture for Palm from it's opening line:

In a land of cellphone giants, Palm is a mouse.

It goes on say something that we've probably heard a few dozen times... Apple is the leader and not going anywhere. Research in Motion has a huge corporate userbase, Google's Android is getting a huge push from Verizon and their new Droid. Microsoft still has a ton of money and isn't going away. Nokia is the world leader in selling cell phones. That's 5 competitors right there who have deep pockets - far deeper than Palm's.

I found a few really great points in this article:

Palm Pixi the Savior? - Palm Pixi might be even important than the Palm Pre. From Jon Rubinstein, Palm’s chief executive:

"We think the Pixi is in the sweet spot of the market now. It was designed for people who are transitioning from feature phones and getting their first smartphone."

Tero Kuittinen, an analyst with MKM Partners agrees:

"The Palm Pixi is the only low-end smartphone with a new operating system. That is fairly impressive."

Kuittinen estimates Palm may be able to sell 10 million phones next year, which would be about 5 percent of the smartphone market. At PalmPixi.org, it's our opinion that this is exactly what it likely to happen - especially with $25 Palm Pixis at Amazon. Since the Pixi has some distinct advantages on the Apple iPhone at a much lower price, we see it as a big seller.
Quality Applications over Quantity - Palm says it's going in the direction that I hoped they would:

"Mr. Rubinstein said Palm would never need as many applications as the iPhone. 'We are focused on quality over quantity', Robinstein said."

I've seen a lot of applications for Palm's WebOS and, thus far, there are few that are worth buying. Many of them are just shortcuts to websites and calculators that you can already find on the web. Palm can make a big difference here by getting out applications that can do more advanced things: record voice, record video, Slingbox, edit Office Documents, etc. Palm doesn't have an app like Shazam for iPhone that listens to songs and gives you song and artist information. It's huge that Palm is talking about this... it will be even more huge if Palm can back it up sooner rather than later.
Upgraded Pre in January? - From the article:

Analysts expect that Palm will sell an upgraded version of the Pre with Verizon early next year and add AT&T later in the year.

Let the masses speculate on upgrades? More memory... definitely. What else? I don't know. I'm not expecting removable storage as the Pre would have go back to the factory for a redesign for that.
Android and Droid not a Competitor? - Interesting quote by Rubenstein here:

"Android, and the Droid in particular, are designed for the techie audience. We are doing a more general product that helps people live their lives seamlessly."

I agree that Palm is doing more with social networking (see Facebook) and Synergy, but I'm not really convinced that Android is all about techies and the techie audience.

I hope Palm is right. As smartphone adoption grows it will have to pick up regular people, not techies. I think the Pixi aimed at a younger demographic - and priced right, could get a large part of that growth market. It will be fun to have a front-row seat as this all plays out.

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