June 25 (Bloomberg) -- Palm Inc., the maker of the Pre, will take its time lining up applications for the touch-screen phone, aiming to appeal to consumers with quality instead of quantity, said software chief technology officer Mitch Allen.

Palm is still working on the guidelines so developers can build programs that take advantage of Palm’s new WebOS software, which can run multiple applications at once, he said. Allen helped develop the system with Jonathan Rubinstein, who took over as chief executive officer this month.

“We clearly have to have a product we’re proud of,” Allen, 53, said this week in an interview in Sunnyvale, California. “Taking a little bit more time right now does trump the excitement that comes from having something that people can play with today.”

The Pre debuted June 6 to glowing reviews that nonetheless highlighted its dearth of applications. The phone currently has about 30, including the Pandora music service and the Fandango film-ticket vendor. That compares with more than 50,000 for Apple Inc.’s iPhone and at least 1,000 for Research In Motion Ltd.’s BlackBerry, whose App World store debuted in April.

Offering a variety of applications will become the industry norm as more people seek devices that surf the Web, allowing them to find restaurants and e-mail friends, according to CL King & Associates analyst Lawrence Harris. So-called smart-phone sales will rise this year, overcoming the slowdown of the overall handset market, according to IDC.

“It’s really become a priority,” said New York-based Harris. “We may arrive at a situation where people may say, ‘Yes, this great application is on the BlackBerry but not other devices, so yes, I’ll choose a BlackBerry.’”

Resurrection?

Palm, based in Sunnyvale, was a pioneer in handheld devices more than a decade ago with the Pilot. Today the company reported a loss of 40 cents a share for the fourth quarter ended in May, excluding some items. That compared with the 65-cent average of loss estimates compiled by Bloomberg.

Rubinstein aims to resurrect Palm’s reputation for innovation with the Pre, whose WebOS software allows users to shuffle through programs like a deck of cards, after eight consecutive quarters of losses. He faces increasing competition from Cupertino, California-based Apple, which released a new iPhone last week, and RIM, whose BlackBerry Curve model was the most popular smart phone with U.S. consumers last quarter, according to NPD Group Inc.

Palm rose 8 cents to $14.02 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have more than quadrupled since January on anticipation of the Pre’s success. Apple climbed $3.64 to $139.86 and Waterloo, Ontario-based RIM fell $1.68 to $69.30.

More Developers

Several thousand developers have applied to build applications for the Pre, said Pam Deziel, Palm’s vice-president of developer relations. At least 500 already have access to Palm’s WebOS software ahead of its public release this summer, she said.

Downloads of Pre applications reached 1 million 18 days after the phone’s debut, according to Medialets a mobile-phone consulting firm. Derick Mains, a spokesman for Palm, declined to comment beyond saying the company is “very happy” with customer reaction.

Apple introduced its application store about a year ago with more than 500, one year after the first iPhone went on sale. Users downloaded more than 10 million for their iPhones and iPod devices in the first three days of its debut, with the amount topping 1 billion in April.

‘Asphalt 4’

The App Store’s top paid games include “Asphalt 4: Elite Racing” and “StickWars,” where players defend their kingdoms against armies of invading stick figures.

“Apple has got a very good model,” Allen said. “It was some very nice work, but it really fit their business model and their company. I think there are other business models and there are other ways to deliver experiences.’”

Sprint Nextel Corp., based in Overland Park, Kansas, is the exclusive service provider for Pre in the U.S. The carrier trails Verizon Wireless, which sells the BlackBerry Storm, and AT&T Inc. in mobile-phone subscribers. All have introduced more smart phones because their users tend to spend more on data than typical customers, with average rates 60 percent higher for the iPhone, sold through Dallas-based AT&T.

Global shipments of smart phones probably will rise 2.9 percent this year, compared with a 12.8 percent decline for the overall handset market, according to June data from IDC, a Framingham, Massachusetts-based researcher.

Palm plans to develop more phones based on the WebOS software. Allen declined to discuss how Palm plans to share revenue with developers or possible new applications.

“We’re less concerned with the numbers and more concerned with, ‘can we deliver breakthrough solutions,’” Allen said.

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net; Amy Thomson in New York at athomson6@bloomberg.net

Last Updated: June 25, 2009 16:26 EDT