Quite a remark, and one that sounds like it had quite a bit of heat behind it. Worth noting, coming as it does after the debut of the Pre, which some critics claim boasts more than a handful of Apple-esque design flourishes. Understandable, perhaps, since Palm’s executive chairman is Jon Rubinstein, the former Apple executive who was behind the iPod.

Now, not two weeks after the announcement of its Pre handset and Web OS operating system, Palm shares are trading up 157 percent, versus the S&P 500–which is down nearly six percent. And to hear tell from analysts who follow the company, Palm shares are poised to go higher still. Because the Pre and Web OS, though they’ve not yet arrived at market or even been given official release dates, are a SMASH HIT. “We believe Palm has authored possibly the best (operating system) in the handset market,” J.P. Morgan analyst Paul Coster wrote in a note to investers. “The Pre is a good device too, with specifications that position Palm well in the smartphone market in 2009,” he noted, adding, “…we think the webOS/Pre is sufficiently differentiated to spur demand and cause a major disruption in the global handset industry.”

Coster sees Palm shipping 2.25 million Pres in 2010, and another 5.75 million in 2011.

Goldman Sachs analyst Simona Janakowski is equally upbeat. “Palm’s story has shifted dramatically in recent days from being on the brink of bankruptcy to potentially entering a powerful product cycle,” she says. Janakowski expects the Pre to sell 850,000 units in the first six months.

Quite a bit of enthusiasm for an unreleased product. No wonder Palm shares continue to rally. Seems the Pre’s best feature is one that wasn’t announced when it was introduced at the Consumer Electronics Show: a mask for an existing business in rapid decline.

Digital Daily covered the Steve Jobs story this week, starting with the all-hands memo in which the Apple (AAPL) founder announced his medical leave and following through with the reactions of both Wall Street and the company’s investors. Then there’s the general response, which has been variously diagnosing Jobs’s health issues and predicting the demise of Apple without him–not without good reason, but quite a departure from the reaction when Bill Gates left Microsoft (MSFT). Digital Daily also noted that even though Palm’s (PALM) stock price made a jump directly after the introduction of the Pre and its new Web OS, the company will need to sell a lot of phones in order to attract a robust community of developers. And let’s not forget the roll call of fallen companies, including two of the latest to fall victim to the econalypse, Nortel (NT) and Circuit City (CC).

Can Mexican billionaire Carlos Slim save the New York Times? MediaMemo had the story of the gray lady’s possible white knight, plus coverage of some recent ideas about how newspapers in general can be rescued from a grim fate. Hint: not by a Facebook event. There are some bright spots for traditional media, though, made possible by the increasingly social Web. Incredible photos are often made available for free and as news is breaking, saving editors from the limitations and high prices they’re accustomed to from established agencies. A perfect example arose this week when U.S. Airways flight 1549 made a spectacular emergency landing on the Hudson. Twitter, a camera phone and an incredible photo almost singlehandedly changed the way people think about citizen journalism–as an aid to, not a replacement for, professional reporting.

At the Consumer Electronics Show, BoomTown moderated the SuperSession panel titled “What Will They Think of Next? Consumer Technology in 2025.” A lot of the discussion involved pretty much the general consensus of what’s on the horizon, but there were some edgier ideas from the panel, which included an interesting cross section of the digital industry. BoomTown interviewed all of the participants on camera afterward about their visions of 2025, and some of the results were pretty funny. Of course, BoomTown had a say about the various degrees of silence and hysteria surrounding Steve Jobs’s health issues, urging people to put things in perspective, and evoking his 2005 commencement speech, in which he advised graduates to “Stay Hungry, Stay Foolish.” BoomTown says: Not this foolish. The passing of the leadership torch at Yahoo (YHOO) took center stage last week, starting with the classy exit of Sue Decker and her memo to the troops. Next up: Yahoo’s official announcement of Carol Bartz as CEO and her first words as its fearless leader: “Yahoooo!” and “Friggin’.” Here’s full coverage of the transition.

Walt Mossberg voiced his strong and sensible opinion about the media circus surrounding Steve Jobs’s leave of absence on Fox Business last week, which is, first and foremost, concern for the man and best wishes for his recovery. On the gadget front, he discusses different options for putting e-books on your cellphone and Web OS, the new operating system that debuted with the Palm Pre. Katie Boehret looked at a couple of Web search tools that deliver better results by paying attention to what results you click on.

More next week. Wait–later this week.

Anarchy! We want Anarchy. We don’t want anyone to tell us what or how we can do anything. The only rule is NO RULES. We want you to distribute our apps, but we don’t want to pay for it!!!! Nothing, nada, zilch. And we want the ability to JAILBREAK! Wheeeeeee!!!!!!”

– Palm developer Jeano tells the company how to make Web OS a success

Clearly, Palm (PALM) is on the mend. Still, the fact that the company is entering a market characterized by fierce competition and a furious pace of innovation puts it at an enormous disadvantage. Further, to stage a comeback, it needs a thriving developer ecosystem. And by some accounts, Palm’s developer ecosystem is in disrepair.

“The Palm developer ecosystem is in pretty bad shape for a lot of reasons,” says Alexis Hinds, founder of Blue Nomad, developer of award-winning Palm apps like BackupBuddy. “Some of these reasons have to do with Palm, and some do not. A lot changed when [Palm founder] Jeff [Hawkins] and [former Palm CEO] Donna [Dubinsky] left to form Handspring, including how Palm related to developers.”

Ben Gottlieb, founder of Stand Alone software, which has been developing Palm apps since 1997, agrees. “There really isn’t much of a Palm developer ecosystem at this point,” he says. “The handwriting has been on the wall for a year or more that the existing Palm OS was dead. Palm’s been working on its next-generation OS for years, but the lack of any real advances in OS 5 has really told the tale. The Foleo was an intriguing concept, but I think quite a few people were burned by its termination (we were not). I can’t speak for other developers, but I know we’ve looked at the whole Palm/PalmOne/PalmSource/Access relationship more with sorrow than with anger. Obviously they were trying to do right by the platform, but there were too many competing interests and players. Most of the Palm developers I talk to have written Palm off, at least in its current iteration.”

Not exactly the words of an enthusiastic of developer ecosystem, are they?

Have they destroyed much of the developer good will? I’m sure some developers would say yes, others might just shrug. Certainly I don’t think the same level of ‘loyalty’ to the platform is there.”

— Ben Gottlieb, Founder, Stand Alone

And indeed, both Hinds and Gottlieb say that prior to the announcement of the Pre and Web OS, they’d been dialing back emphasis on future Palm OS development and spending more time on iPhone and Google’s (GOOG) Android mobile OS. “The demand just isn’t there, and the market is shrinking fast,” says Gottlieb. ”We’ve refocused our efforts on iPhone, and are looking quite intently at Android.”

For its part, Palm may be looking more forward than backward, aiming to attract a new developer base rather than relying heavily on its old one. In any case, neither Hinds nor Gottlieb has written Palm off entirely. “We’re very intrigued by the new Web OS, and will definitely take a closer look when the SDK and devices become available,” says Gottlieb. Hinds says Blue Nomad will port its apps to Web OS if customers adopt the device in any meaningful numbers.

Still, Gottlieb and Hinds both have substantial reservations about the platform’s chances for success in an already crowded market. “I’m not sure the world needs yet another mobile OS,” says Hinds. “I’d have been much more excited if their software stack were running on top of Android. It’s just not clear to me which market segment the Pre is targeting. Watching the keynote, it appeared to be more focused on advanced users of mobile devices, the Web, and social-networking applications. Are there are enough of those people to really sustain Palm in the long run? Is it sufficiently differentiated from the iPhone? I don’t think so,” she adds, noting that that there’s nothing to prevent Apple (AAPL) from copying such Palm innovations as its unified inbox.

Raven Zachary, founder of iPhoneDevCamp, an iPhone advisor, and contributing analyst with The 451 Group agrees. “I think Palm overestimates its opportunity relative to Apple,” he says. “This is not a platform that effectively competes with iPhone. It competes with the other smartphone platforms. With Pre, Palm is back in the game, but not a game with Apple–a game with Google, RIM (RIMM), and Microsoft (MSFT), as a second-tier smartphone platform.”

Which is, of course, a much, much easier game in which to play–and perhaps even for Palm to win. But how? Get the Pre to market fast, promote the hell out of it and do its best to court developers–old and new.

“They need to convince consumers to buy the phones, and developers to write apps,” Hinds quips. “And as far as getting developers on board, I’m sure they will if enough devices are sold. But I don’t think a developer will necessarily start writing for Web OS just because he or she had been previously a Palm developer. And supporting more than two platforms [e.g., iPhone and Android] is very challenging for the smaller developers that drove a lot of the innovation on PalmOS.”

Palm, it should be noted, plans to do all it can to encourage developers to do just that. “Palm OS developers are very important to us,” says Palm spokesperson Lynn Fox. “There are a number of ways to migrate data from an existing PDB file to a new webOS app, and soon we will share more information for developers with Palm OS applications who want to build webOS applications.”

“For the OS to succeed, I think Palm really has to execute quickly,” says Gottlieb. “They’ve shown a stellar product, but if it doesn’t hit the market soon, they’re liable to get equaled or surpassed by other players in the market…well, one player really,” he adds, referring to Apple. “To be honest, we weren’t expecting anything of this level out of Palm. They really hit a home run with the design and architecture of the OS, at least in terms of what’s been disclosed. Last week, I would not have projected a bright future for Palm, but the Pre has a lot of promise.”

As I write this, Palm is trading at $6.10–up an astonishing 85 percent since its big announcement. And it seems destined to go higher still, given the enthusiastic reception analysts have given it.

Deutsche Bank’s Jonathan Goldberg raised his rating on Palm (PALM) to Hold from Sell saying this morning that he is impressed with the Pre and the direction in which the company is now heading.

“Our thesis on Palm has been that its future is a binary outcome,” he wrote in a note to clients. “We are favorably impressed with the new device and more importantly with the new WebOS. We think the focus has now shifted from their mere survival to execution. The earnings model has the potential for significant earnings leverage, but our outlook is tempered by Palm’s history of missteps. We think they can ship 1m units FY09 and 4m in FY10. The stock has run significantly over the past two days reflecting this, but as we learn more about the popularity of the OS and the potential for them to actually ship a UMTS version of the Pre this year we will revisit our thesis.”

Obviously, there are a few noteworthy caveats in there. Still, Goldberg’s note is vastly different from the funereal notes analysts were writing about the company less than a month ago. Indeed, on Dec. 18, Canaccord Adams analyst Peter Misek essentially dismissed the company. “Due to increased competition in the industry, Palm has lost its place as a leading smartphone manufacturer and has gradually become less relevant as more competitors have introduced more innovative smartphone devices,” Misek said. “The company is financially distressed and lacks any viable future catalysts which could help restore profitability…. We believe that Palm has become largely irrelevant in the smartphone space due to a series of strategic errors and poor execution.”

Clearly, Palm’s situation has changed for the better. Now, let’s see for how long.

Digital Daily was on hand at Macworld ’09 Monday. Despite the flurry of wonky reporting about the health and/or “imminent death” of Steve Jobs–put into perspective here by BoomTown–nothing too remarkable happened during Apple’s (AAPL) final appearance at the annual event. Phil Schiller did a solid job delivering the keynote in Jobs’s place, introducing a new 17-inch MacBook Pro with an eight-hour internal battery and some innovative updates to iWork and iLife. Schiller ended his keynote with the announcement of changes in pricing and digital rights management for iTunes, punctuated by the surprise appearance of crooner Tony Bennett. Apparently, as Bennett sang, the best is yet to come. Crack photojournalist Adam Tow was on hand to capture the keynote in its entirety–All Things Digital’s photo coverage can be found here.

MediaMemo reported from CES about the pervasive 3-D theme of the conference and wondered whether people would pay cash to see a football game in 3-D at a theater instead of just staying home. There was the ongoing litany of the casualties of the econalypse: “Semantic” ad network Peer39 shut down its ad operation this week, Hearst is about to pull the plug on the Seattle Post-Intelligencer, Forbes announced layoffs and Sir Howard Stringer announced the elimination of thousands of jobs at Sony (SNE). MediaMemo also caught the much anticipated introduction of Palm’s (PALM) new smartphone, the Palm Pre, and its new Web OS, a combo Palm deems superior to the iPhone and that many others consider Palm’s last chance for survival. The product’s success or failure will have a lot to do with its pricing, about which there’s much disbelief.

BoomTown had the lowdown this week on an amusing rumor about a Microsoft-backed (MSFT) run at Yahoo (YHOO), the emergence of Carol Bartz as the top prospect for Yahoo CEO and Microsoft’s deal with Verizon (VZ) and Dell (DELL) to distribute search. Jerry Yang submitted to the all-seeing eye of BoomTown’s Flip camera along with Yahoo President Sue Decker to talk about Yahoo’s new product, Connected TV. The camera also caught some chatty attendees and a few demos, including one of a new Disney (DIS) music product given by a guy who looked like a member of ZZ Top.

Speaking of ZZ Top, catch gadget godfather Walt Mossberg trying out some 3-D glasses on his annual odyssey around the convention floor. All he needs is a longer beard and a ‘32 Ford and he could be a band member, too. Walt and colleague Katie Boehret caught many of the more interesting gadgets on video, and Walt previewed some more for FOX News.

More next week.

Wall Street seems convinced that the Pre is not a postscript for Palm (PALM), but the beginnings of its rebirth. A historic turning point worthy of a trading bacchanal. Indeed, expressing a “renewed confidence in Palm’s prospects, Standard & Poor’s raised its target price on the company to $4.50 from $2.50. “Pre uses a new operating system that allows for the merging of multiple data sources,” Standard & Poor’s analyst Todd Rosenbluth said in a research note. “While the new system has been in long-term development, we believe it could help to bring consumer and carrier interest back to PALM’s devices, which have been losing market share.”

Matt Hoffman of Cowen & Co. agreed. “We believe WebOS will immediately be competitive with the industry’s most advanced mobile platforms, including Apple’s OS X and Google’s Android,” he wrote in a research note to investors.

Other analysts, while similarly optimistic, tempered their enthusiasm with hardcore market realities.

“Palm’s challenge will be to steal at least some of the thunder from the heavyweight contenders in the smartphone market,” said Charlie Wolf of Needham & Co. “In our opinion, the Pre clearly outshines Windows Mobile and Google’s Android platform in their current iterations. But whether it can gain breathing room in an increasingly crowded market remains an open question, especially in view of the prospect that stunning new operating systems and smartphones will also debut during the year.”

“Palm came out with guns blazing,” he told RCR Wireless. “They met or exceeded expectations. This gives the company a sense of momentum and a return to confidence. Of course, the bigger question is how the device is marketed. Will it launch on time? Will AT&T Mobility and Verizon Wireless get on board? Sprint alone isn’t enough to save the day. The profitability impact at this point is unknown.”

By all appearances, the Pre is a slick little device. But is it formidable enough to stand its ground next to Apple’s iPhone, Research in Motion’s (RIMM) BlackBerry and the groaning board of Android devices currently in the handset market product pipeline? Palm (PALM) certainly seems to think so. In fact, the company is so confident in the Pre that CEO Ed Colligan seems to think it won’t need a sub-$200 price point to pull share from Apple (AAPL), et al. “Why would we do that when we have a significantly better product,” he asked ATD’s Peter Kafka earlier this afternoon.

Well, here’s one reason: To stay in business. Because despite Colligan’s claims of a “significantly better product,” Palm hasn’t raised the smartphone bar much (if at all) with the Pre. In fact, the device is as noteworthy for the features it may not include as for those it does. Absent from today’s grand unveiling was any mention of video. Also missing was a rival to Apple’s App Store and the robust developer-consumer ecosystem Apple has created around the iPhone and iPod touch. Even Google’s (GOOG) Android OS debuted with that. And the name; well, “Pre” isn’t likely to do very much for Palm’s already much diminished brand recognition.

Now, perhaps video and an app store are coming. But even if they do, will the Pre really be worth paying a premium for, as Colligan suggests? I’m not so sure–especially when the inevitable updates to the iPhone and BlackBerry remove the few advantages it does have over those devices. “Fast Web browsing” and “efficient multitasking” just aren’t big differentiators anymore.

That magnetized conductive charging platform sure is nice, though.

UPDATE: Turns out Palm is planning an App Store rival. According to the Pre press release, “The platform’s flexible environment will also allow developers to distribute their applications over-the-air via an on-device Palm application store.” And though no mention was made of video during Thursday’s Pre unveiling, the device will support it–both on the device and streaming. Said a Palm spokesperson, “The Pre has video playback, including YouTube video from the internet.”

PREVIOUSLY:

• Yeah. Those PC Guys Never Stood a Chance, Palm.
• Palm: Spare Change for Financial Viability?
• Alms for Palm?
• Palm New-ness: A Target Price of Zero
• Palm: Hey … Hello? Excuse Me … Over Here!