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Motorola Droid Lands Hard on Palm

Stocks in this article: MOTAAPLPALM

NEW YORK ( TheStreet) -- Motorola Droid's lukewarm splashdown in the smartphone market may have caused only ripples at rivals Apple (AAPL) and Research In Motion (RIMM), but it may have tossed Palm (PALM) out of the pool.

Motorola's (MOT) Droid, the big touch-screen phone that made its closely watched sales debut at Verizon (VZ) stores earlier this month, arrived to a mixed reception. It was quickly apparent that the $200 device, powered by Google (GOOG) Android technology, wasn't going to immediately -- or possibly ever -- knock the iPhone off its pedestal.

Droid has a brilliant screen, a slide-out keyboard, the most advanced Android operating system available and enough applications to keep many mobile users happy with their new attractive pocket computer.

Droid
Motorola Droid

Droid is many things, but it isn't a blockbuster.

Though Verizon very much hopes the Droid is cool enough to keep its customers from fleeing to AT&T (T), Apple iPhone devotees, the target market for dazzling new gadget, won't find the Droid a must-have item.

Research In Motion, the No.2 smartphone maker, had reason to fear the Droid's arrival. Big telco partner Verizon was pouring its biggest marketing investment into the Motorola phone, a move that could only serve to push the BlackBerry aside.

But RIM has its own strong following and new phones like the BlackBerry Storm 2, Tour and Curve models may be a way of keeping fans happy.

Droid, as it turns out, is also not a big threat to BlackBerry because it doesn't work behind the corporate firewall like RIM does. Droid is designed to sync with Microsoft (MSFT) Exchange, the top business email server. But to do so securely, IT departments need to buy additional security systems to make it happen.

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