Could Motorola put the squeeze on Palm and RIM?

Now that Motorola and Verizon have rolled out the Droid, analysts are beginning to worry about Palm's prospects during the holiday shopping season.

With the introduction of its first two Android devices, Motorola--which has banked its comeback on the Android platform--has stolen momentum from Palm and its webOS platform and might impact BlackBerry sales in the enterprise. Citi analyst Jim Suva downgraded Palm and Research In Motion while upgrading Motorola.

"Motorola is launching of one of the most compelling offerings at [a] time when many investors have given up on the company's handsets," Suva wrote in a research note. "The revolution of product and application service offerings is going to start to crack open the enterprise door and could pose a risk for BlackBerry. Major shifts in promotion support creating a promotion commotion in the months ahead [that favor] Motorola and post a challenge for RIM and Palm."

Indeed, Android is on the brain. Verizon's big holiday season device is Motorola's Droid, while T-Mobile USA is touting the Cliq during the holiday season. And Sprint Nextel, the only U.S. carrier currently offering the Palm Pre, is likely to emphasize its new Android offerings, the HTC Hero and the Samsung Moment, via its holiday marketing, possibly at the expense of the Pre. Further, Sprint is set to launch Palm's second webOS phone, the Pixi, later this month for $99, which could potentially cannibalize Pre sales. In its most recent quarterly report, Palm disclosed sales of around 800,000 smartphones, the vast majority of which were the Pre.

However, Palm likely is hoping to boost its standings in the coming months with expanded distribution; the company has rolled out the Pre in international markets, and Verizon Wireless has said it will sell the device sometime next year.

For more:
- see this Barron's blog post
- see this TheStreet.com article

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