Apple Still Smartphone King

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After a quick in-person peek at Palm’s (PALM) new Pre, it’s clear that Apple (AAPL) is still leading innovation in the mobile phone industry. And Apple is set to extend its lead Monday at its Worldwide Developers Conference, when the company will likely announce a new iPhone.

The Pre, which we spent some time playing with this morning, is very nice. But while it’s obvious that many of its features and design cues came from Apple, it’s less obvious what, if anything, Apple will want to borrow from the Pre. (Except, perhaps, background processing. But that’s not a Palm invention.)

Meanwhile, Apple’s iPhone 3.0 software and the new iPhone hardware will push Apple further ahead of Palm, BlackBerry maker RIM (RIMM), Google’s (GOOG) Android phones, and other competitors. Apple is likely to announce a slightly more powerful phone, which will fix the iPhone’s biggest problems — nagging processor and network lagginess, and no video recording. And possibly a cheaper iPhone (and ideally, a cheaper AT&T plan), which could help Apple sell iPhones to more people.

This isn’t to rag on Palm. They really did a nice job with the Pre. It’s vastly better than their previous phones, and better than pretty much any other smartphone on the market besides the iPhone. But Apple is still leading, and will likely extend its lead on Monday.

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