The 3g iPhone launch got me thinking about Palm’s place in the smartphone universe, and how they’ve squandered the huge lead they once had. Palm has been essentially updating the Treo 600 for years now, with nothing new and revolutionary even being hinted at. Don’t get me started on the still-born abomination that the Folio was.

What would it take for palm to make a comeback? Not as much as you might think. Imagine a pretty white Palm Centro, but with a full touch-screen instead of a keyboard. Palms already have touch screens, and past devices relied on software keyboards and handwriting recognition, so it’s not like Palm would have to spend millions on new technologies. They could replace their own aging operating system with some version of Linux (they are working on a version of their own, and if they can’t get it done there are plenty of other companies they could license a finished OS from). Or they could possibly use Google’s Android. Or (shudder) they could use Palm OS 5. At the very least, they would need to use a new interface/launcher (the LifeDrive had a nice interface) and a much improved browser (talk to the Opera folks).

The finished product shouldn’t be any more expensive than the current Centro. Losing the keyboard should offset the cost of a larger screen. The only thing “new” would be Wi-Fi, which Palm offers on other devices. Here’s my quick-and-dirty interpretation (pardon my PhotoShop skills):

Could Palm build an inexpensive but serious iPhone competitor? Absolutely. Will they? Probably not.