At CES the product I was most excited by was the Palm Pre. After all, they had hired a bunch of people from Apple and it went further than the iPhone in many places. It had a keyboard. It has an OS that let you run multiple applications at the same time (something the iPhone doesn’t do) and did copy and paste. The OS seemed even better thought out than the iPhone was. Contacts collected data from Facebook and other social networks.

It looked like it would win in the marketplace.

But now it’s March and the tides are changing.

First, last week Apple came out with a set of APIs for the iPhone that many people missed because they were drinking at SXSW. More on those in a second.

But today stuff is leaking about a new iPhone that’s coming out.

Now I’m starting to doubt whether Palm can make it. I’m not the only one.

It’s shocking, actually, how well Apple has done with developers. Remember, I was at the first iPhone Dev Camp (included here is a picture of those who attended the first Dev Camp). Apple didn’t show up (a couple of employees did, but they weren’t even allowed to acknowledge that they worked at Apple). How did they turn developers onto the iPhone?

1. Apple sold more than 10 million phones.
2. The experience of using the iPhone got geeks excited. So excited that they put together their own DevCamps even though Apple was pretty clueless.
3. Apple turned on a store that let lots of developers build businesses that are rocking and rolling. Success pulls in even more developers.
4. Now Apple is throwing marketing dollars behind developers. I’ve seen tons of TV ads that Apple’s done. I’ve seen cool Apple ads on the web. The whole front of Apple stores right now features apps.
5. The new OS, coming this summer, lets developers do even more with their iPhones. Pandora’s CTO, Tom Conrad, talked with me at SXSW last week and he was drooling over some of the kinds of things he’s going to be able to build for the new OS and that was before he heard the rumors of the new iPhone.

Can Palm compete with this? If they do, I’ll be the most shocked blogger out there.

I think the bigger question is can Palm get enough hype to push it into a second place status and tear away market share from RIM, Microsoft, and Nokia. The answer to that one is yes.

Why? Because the Palm Pre is so much better than any other phone other than the iPhone. (The Palm is better than the iPhone, actually, but only if you don’t consider all the apps that are being built for the iPhone and only if you don’t consider the new 3.0 stuff that Apple announced last week).

I bet this is the strategy that Palm’s going for. They know not everyone will go for an iPhone. Some people hate Apple (yes, it’s true). Some can’t stand the touch keyboard. Still others still like Palm or just want to use Sprint instead of AT&T.

So, I don’t think there’s any way for Palm to really tear much market share away from the iPhone, but they can do a pretty nice business going after everyone else.

Either way, if I worked at Nokia, Microsoft, or RIM, I’d be working extra hard to figure out how to deal with Apple and Palm. They are going to make 2010 really rough for other cell phone manufacturers if things stay the way they are.

The fun thing about this industry is that in a few months everything can change in a couple of months. Hang onto your seats.

UPDATE: @ian_Wright asked “Do you think Android has a chance?” Yes, definitely. But they are fighting over #2 space too. It looks like Apple isn’t stumbling with developers like it did in the early 1990s with the Macintosh, so it’s going to be very difficult for Android to get mindshare over the iPhone. But Android can easily compete with Palm. Losers here? Nokia, RIM, and Motorola.

Also, @whurley points out that two members of the original iPhoneDevCrew have already put together http://predevcamp.org and it will be in more than 60 cities.