Motorola Droid Lands Hard on Palm - TheStreet

NEW YORK (

TheStreet

) --

Motorola Droid's

lukewarm splashdown in the smartphone market may have caused only ripples at rivals

Apple

(AAPL) - Get Report

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) - Get Report

stores earlier this month, arrived to a mixed reception. It was quickly apparent that the $200 device, powered by

Google

(GOOG) - Get Report

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.

Motorola Droid

>>Photo Gallery: Android

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) - Get Report

, 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) - Get Report

Exchange, the top business email server. But to do so securely, IT departments need to buy additional security systems to make it happen.

How big of an obstacle is that? Just ask Apple.

Starting more than two years ago, with the original iPhone, Apple preloaded

Cisco's

(CSCO) - Get Report

VPN security software so office workers could connect via iPhone. Yet even with that head start, the iPhone has yet to really crack the corporate market. The resistance is due largely to BlackBerry's dominance and also the annoyance of having to set up additional security.

RIM looks good in this light, since the threat to its business customer is minimal and its push into the consumer market hasn't been derailed by the Droid.

The same cannot be said about Palm.

The

Palm Pre

and now

Pixi

phones were designed on a new Web OS system that, like Android, was a compelling alternative to the fading Microsoft Windows Mobile and the exclusive RIM and Apple software.

But the Pre phone at

Sprint

(S) - Get Report

started with less than a bang and has been nothing but a whimper since.

The Droid's arrival has effectively crowded Palm out of market. And whatever the Droid didn't accomplish, Pre's price cuts and the cheaper Pixi phone will.

--

Written by Scott Moritz in New York

.