When Peter Kafka asked if the Palm Pre's price would be less than the iPhone's $199, Palm CEO Ed Colligan replied, "Why would we do that when we have a significantly better product?"
Apple has had two additional years to let their product bake. In that time, they have launched a major update to the OS which has delivered ... not much. While there is a public sdk, overall iPhone software quality is still a bit ... lacking. Unless you count "Pull My Finger" as revolutionary (which its multi-month spree at the top of the software charts seems to suggest).
While it may hurt to admit it, the iPhone is still a deeply flawed device (even after nearly two years on the market). It can't even do copy and paste, a function that the old palm OS (debuted in 1996) handled quite well. I won't even mention the complete lack of a task or notes sync, which are both part of the ActiveSync protocol that they leased from Microsoft (how hard is it to write a simple conduit that uses the existing [not to mention worthless] notes app on the iPhone to sync with the server?).
I am happy that Palm has been able to produce the first serious competition for Apple. It will be fascinating to see how Apple responds. I've also been interested to see how the normal nothing but Apple coverage following MacWorld appears to have been completely co-opted. All I can say is: Well done Palm!