You've got to feel sorry for smart phone maker Palm. Here's a company that was not just ahead of the curve when it comes to handheld computing, you can say it invented the curve. The Palm Pilot was the first handheld computer to really gain wide consumer acceptance, and it was one of the first companies to put a phone in what was then called a Personal Digital Assistant, or PDA. But now Palm is in distress. Last week its executives warned Wall Street that its revenues for both the quarter and the fiscal year would come in markedly lower than expected. The reason is simple: When folks want to buy smart phones, they're choosing models other than Palm's Pre or Pixi. The corporate take on it Of course, Palm CEO Jon Rubenstein gave it a much more corporate spin, telling employees in a memo that 'our softer than expected performance is due to slower-than-expected customer adoption of our products.' No matter how you put it, these are not happy days at Palm. The Pre and its innovative webOS software were launched with great hoopla during the International CES electronics show in January 2009 and were expected to pull Palm out of a slump then. But instead of being the company's saving grace, the product has been unable to overcome stiff competition, particularly from RIM's BlackBerry, Apple's iPhone and devices that run Google's Android operating system. The market research firm Gartner, in a report issued late last month, put Palm's webOS-based phones in seventh place in sales worldwide for 2009, with only a .7 percent share of the market. By contrast, the No. 6 position goes to Android, with 3.9 percent. Why is this happening to Palm? There are several reasons, I think. First, Palm got off on the wrong foot with its early marketing. A series of bizarre TV ads that featured a pale, ethereal, redheaded woman musing nonsensically about topics metaphysical was more creepy than cool. In addition, Palm played the exclusivity game, but without killer marketing to back it up, the strategy only served to limit Palm's potential distribution. Both the Pre and the newer Pixi were only sold through Sprint at first. That's changed recently with Verizon offering beefed-up versions of both models, and AT&T said earlier this year that it will soon start selling a webOS phone. Latest versions If Palm's on the ropes, it's not necessarily because its phones are unworthy. The latest versions of its devices are quite good. I've been playing with the Pre Plus and Pixi Plus, the new Verizon models. I had reviewed the original Pre when it came out last year, and I got a chance to test the original Pixi and recommended it as great bargain in a holiday gift roundup. Both Verizon models have a lot to recommend them. The 'Plus' addition to their names means different things for each phone. The Verizon version of the Pre has a streamlined look. It's still a slider phone, with the keyboard sliding out from under the screen. But Palm removed the physical button that was below the display on the Sprint version -- you now only need tap a smooth area where the button used to be. The keyboard also has been tweaked so it's firmer, which for me improved typing accuracy. Unfortunately, the keyboard is still small, and if you have big hands you might not care for it. The Pre Plus has more memory -- 16 gigabytes compared to 8 on the Sprint model. The RAM used for applications also has doubled, and this helps both if you need to run a lot of applications at once -- and its ability to multitask very well is the webOS' strongest suit. Wi-Fi connection The Pre Plus has the ability to act as a Wi-Fi hot spot, working in a similar fashion to the MiFi devices sold by Verizon and Sprint. Here, you download a free app from the webOS Market, configure it as you might a wireless router, and then other devices can connect to it and share a link to Verizon's 3G network. Unfortunately, you have to pay extra for this -- a lot extra, $40 a month. That's on top of your regular data plan. Ouch! With the Pixi Plus, the biggest change is that it now has a Wi-Fi connection, something the original sorely lacked. It's still slow compared to the Pre, but an updated version of the webOS made available last weekend has given it a dramatic speed boost. (The update also adds slick video capture and editing capabilities to both phones.) I think the Pixi Plus' simple candy-bar design is more pleasant to hold and use as a phone than the Pre, and given the option between the two webOS devices, it's the one I'd buy. The Pre Plus currently sells for $150, and the Pixi Plus goes for $80 -- both require a two-year contract. If you buy either phone, Verizon will give you a Pixi Plus free, though you must sign up for a family plan. I'm hoping Palm is able to pull back from the brink. The webOS is an excellent platform, and I want to see what Palm can do with it over time ... if it gets the chance. dwight.silverman@chron.com blogs.chron.com/techblog twitter.com/dsilverman XXX - End of Story3D 