It’s funny how many similarities this device has with an Apple Watch. It is an accessory to your main phone. It is designed to make you more engaged with the world and less distracted by your phone, whilst still staying connected. It uses the same phone number as the primary phone, and is billed in the same way as an LTE Apple Watch too. Even the free-flowing home screen of icons shares a resemblance to the watchOS honeycomb app grid.
Opting out of a battle with the titans of the smartphone industry is probably a wise move. It’s nigh-impossible to see an opening in the Apple-Samsung high-end duopoly and the low end flood of Chinese Android phones at rock-bottom prices.
A casual communicator, phone-as-accessory, idea is certainly novel. I don’t know if Palm will be able to shake off the customer hesitation that arises because ‘they already own a phone’ though. It is hard to sell someone on the idea of owning, and paying for, a second flavour of something they already own. The Palm proposition is a hefty $350 handset purchase, plus $10 a month for the add-on contract. Smartwatches are different because they are distinct form factor products and offer a combination of unique features, like intimate health and fitness tracking, and convenience.
Rather than aiming to be a secondary device, perhaps they should up the price to the $500-600 level and make the best standalone smartphone they can. Let the USP be that it is small and compact. Make the (modern) iPhone SE of Android phones. This is a market segment that is currently starving for anything new. All the big players are refusing to consider screen sizes smaller than 5 inches. I think there’s enough people who want something like that to carve a decent niche out of the overall phone market.