Palm debuted the Palm Pre at CES today. I predicted that Palm would file for bankruptcy protection this year, but this phone may save them. (My first 2009 prediction that has been proven wrong.) Finally there is a device that can go head-to-head against the iPhone.
Palm has the hardware. The question is will the webOS store be able to compete with iTunes. I don't think it will be quite that size for a while, but the iPhone has set off a gold rush for smart phone developers and I think they will be fired up for the new Palm in a way they haven't been for Android.