In January of 2009, shares of Palm traded at a little over $3 as everyone awaited details of the once-mighty smartphone maker's plans to save itself from certain death. In the wake of the Pre's successful unveiling later that month at CES, Palm's stock price more than doubled, and optimism about the Pre's prospects eventually drove shares to a high of over $17 in October of last year. But as of this past Friday's earnings report, sales are way below Palm's and Wall Street's expectations, the company has little cash left on hand, and shares of PALM have dropped all the way back down to $4. There's a growing consensus—as expressed by the market—that there are only two possible futures for Palm: acquisition, or insolvency.

So what happened? Wasn't webOS the greatest thing since the original iPhone OS? Wasn't the Pre a great phone? How did Palm blow it so badly?

I was a Pre user up until January of this past year, when the Nexus One came out. I went with Palm as far as I could, but in the end, I bailed. Here's where I think Palm went wrong, and why I left the Pre.

The App Catalog: the tail never got long enough

One of the most exciting aspects of the Pre launch was the promise of a new, more open platform for app developers. Palm's webOS and App Catalog were supposed to be so many things that the iPhone OS and App Store weren't: open, fair, developer-friendly, and homebrew-friendly. There was some initial grumbling that the Mojo SDK forced developers to use Web technologies like Javascript and CSS, but overall the developer response was positive, and we all awaited the inevitable flood of webOS apps. But the flood never came, and the Pre seemed to fizzle in the ensuing app drought. In the end, the webOS app shortage meant that the Pre never benefitted from a powerful "long tail" effect that the competing iPhone enjoyed.

When the Pre launched in early June of 2009, the App Catalog had only about 30 apps. In July, there still weren't any apps, nor were there in August. Eventually, there was a trickle of apps into the store, and by the time the "beta" tag came off at the end of last year there were just about 1,000 apps on offer. One thousand apps is peanuts compared to the iPhone, which has well over 100,000 apps on offer, or Android's 10,000+ apps.

Even so, you might think 1,000 apps should be plenty to fit everyone's needs, but then you misunderstand how the iPhone's App Store contributes to Apple's success. In short, 100,000 apps is a really, really long tail, and in that tail everyone can find one or two goofy, niche apps that they really like. And when they find those apps—my dad loves the bubble wrap and the Bible translations, my wife loves the koi pond and the kiddie apps that entertain my daughter, and I like the IRC clients—they show it off to friends and family. And when one of my dad's non-iPhone friends sees the bubble wrap and the six different Bible translations, that person doesn't say to himself, "my God, it has bubble wrap and Bibles. I must buy this phone." Rather, he says, "if it has bubble wrap and Bibles, I bet it has something really cool for me, too. I must buy this phone."

The power of the long tail for app stores is that everyone can find and share a handful of quirky little apps that really excite them for whatever reason. And when they share those apps, they're essentially shilling for the platform, not the specific apps. Every time two people pull out their iPhones in a crowd and start trading recommendations for incredibly niche apps that fit their specific interests, everyone who doesn't have an iPhone feels like they're missing out.

By the end of 2009, as a Pre user, I definitely felt like I was missing out. I wanted games and IRC clients and quirky apps of my own. My wife had an iPhone 3GS, and I envied her for it. I still liked all of the aspects of webOS that I raved about in my review of the Pre, but I felt like I was sacrificing for those features. I was suffering the Pre's barren app catalog in exchange for the benefits of Synergy, multitasking, and cloud messaging.

Lost momentum, and the 3GS

Closely related to the App Catalog drought in the summer of '09 was the issue of overall platform momentum and buzz. The Pre got off to a great, buzz- and hype-filled start. And then nothing. For months, there was no new hardware, no surge of new apps, no big announcements or reveals, and no reason to talk about or write about or think about Palm.

Meanwhile, as Palm was losing momentum for lack of announcements and progress, Apple launched the wildly successful iPhone 3GS. The 3GS was a truly great smartphone, and people bought millions of them. Palm had no response ready, and when I brought home a 3GS for my wife, that feeling that I was missing out really took hold.

Pre's hardware is the Xbox 360 of smartphones (in a bad way)

The review unit that Palm sent me broke shortly after the review was done, though I ended up buying a Pre for myself so it didn't matter. But then that Pre had problems—performance was atrocious (especially with the dialer), and there was something wrong with the proximity sensor. I griped about it a lot on Twitter, and after a few weeks of headaches it was clear that my unit was a lemon.

Yet it seemed to me that everyone's Pre had problems. I've only met one Pre owner in-person who hasn't sent at least one phone back, but I've met many people who have returned multiple Pres. When you pull out your Pre somewhere and another Pre user spots it, the odds are close to certain (in my experience) that that person has sent at least one unit back because of some kind of issue. Every single reviewer that I know of sent at least one Pre back in the beginning.

I realize that there has been a ton of debate over the actual return rate for the Pre, with a number of analysts claiming that the returns issue is overblown and that there's nothing out-of-the-ordinary going on. But based entirely on my own anecdotal experience, it's my very strong impression that there were serious quality control problems and that returns were common.

Even if I happen to inhabit some vortex of Pre malfunction, and my experience is totally atypical, it's still the case that only a slightly elevated return rate is bad news for a fledgling smartphone like Pre. The one thing people don't want with a phone is trouble. A glitchy phone is a terrible thing, and given the kinds of situations that people use their phone in (driving, cooking, running, secretly during a meeting, in an emergency, etc.), the average person's tolerance for phone gremlins is zero.

Mirror mirror: Pre was targeted at women(?!)

I'm fairly convinced that Palm intended the Pre to be a smartphone that was designed with women in mind, and that this somewhat bizarre decision was a mistake. Regardless of whether women do or don't really represent a distinct and grossly underserved smartphone market (this proposition sounds dubious to me, but I'm a guy, so what do I know), Palm's lame attempts at targeting women probably hurt more than they helped.

There was a famous incident in early July where Palm backer Roger McNamee—the money man who recruited Jon Rubenstein to make the Pre—got into an awkward tussle with Kara Swisher over the mirror on the back of the Pre. Let's roll the tape:

MS. SWISHER: Who do you consider your customers? Is there a demographic you are aiming for? MR. MCNAMEE: People who are really busy. People who use the Web a lot. For one thing, look at this device. There has never been a smartphone designed before for people who care a lot about how it fits in your hand and who care about integration of multiple personal information or synchronization from the cloud. It has a mirror on the back. Remember, there has never been a smartphone designed for the needs of women before. MS. SWISHER: Wait, wait. Women need mirrors more than, say, you? MR. MCNAMEE: No, I am saying if you have the opportunity to stick a mirror on here, why wouldn’t you do it? If you are making it for 25- to 40-year-old nerds, you would have put a black thing back here. But we are sitting here going, “Look, it costs nothing. Why don’t we do it because you know what, people actually do need mirrors from time to time.” ... MS. SWISHER: Are you aiming at the ladies? It is smaller, and it is cuter. MR. MCNAMEE: Look, 52% of the population is women, and they have been grossly underserved. MS. SWISHER: The iPhone isn’t the scariest phone in the world. MR. MCNAMEE: We did a study of every single advertisement done in the smartphone category over the last three years, and other than Palm, there have been a total of four instances and one print ad by BlackBerry ever aimed at women. All the rest of them have Star Wars themes and they are all clearly aimed at testosterone-laced, tech-driven men.

The mirror on the back of the Pre and the odd, off-putting, ad campaign both are emblematic of what was ultimately wrong with Palm's awkwardly executed targeting of women as a distinct smartphone market: it just didn't work.

The mirror was worthless, and good only for checking your teeth after dinner. (I could also imagine signaling with it if I were stranded in the wilderness.) As an actual mirror for anyone (woman or man) who cares about mirrors and needs one for cosmetic reasons, it was a total failure. Likewise with the ad campaign: people just didn't respond to it, regardless of what kind of reproductive equipment they had in their pants. It just didn't resonate with anyone.

In ways large and small (including, I suspect, the form factor), Palm tried for women and they missed everybody. They should have just tried for everybody.