It’s a one–two punch that, on the surface, looks brutal. Merely two weeks after Palm launched its Hail Mary pass with the Pre, Apple has hit back hard with its 3.0 software update for the $99 iPhone 3G (and the original iPhone) and a faster, smarter device in the $199 iPhone 3G S, which can record video. As far as I’m concerned, the bigger threat to Palm (and Sprint) is the new software. Its chock-full of features, including a Spotlight Search function that’s more comprehensive than the Pre’s Universal Search, and cut-and-paste that puts the Pre to shame. In fact, 3.0 has so many goodies that a good percentage of iPhone 3G owners likely won’t upgrade to the iPhone 3G S, never mind switch carriers to get the $199 Pre. Many Sprint customers could wind up switching from Sprint to AT&T to get the lower cost iPhone. Not good. Here’s what I think Palm and Sprint need to do to get the buzz back: $50 For Unlimited Data. Yes, Sprint already offers a better deal with the Pre in terms of monthly costs because it includes unlimited text messaging, GPS, and Sprint TV with its data plan. But the carrier’s exclusivity for the Pre is over at the end of the year. Now is the time to get customers from other carriers, including Verizon Wireless, to switch. I say offer Pre buyers (and buyers of any other Sprint smart phone) unlimited voice and data for $50 per month for one year, instead of $99. Doing so will turn some heads. Cable companies do limited-time offers, why not wireless carriers? Let Pre Owners Tether. At least for now, AT&T will not let iPhone owners tether their devices to their computers so that they can use the handset as a modem (although there are hacks and workarounds). So far, Palm and Sprint have said this kind of support won’t be offered on the Pre, even though other Sprint smart phones could be used as modems. We say lift this restriction and use tethering as a differentiator. Oh, and include this capability in the $50 unlimited plan. No extra fees. Fix Universal Search. Currently, the Pre can search only contacts and applications (as well as stuff on the Web through Google, Wikipedia, and Twitter). Palm needs to roll out an update fast that includes e-mail, the calendar, music, and more. For me, not being able to search my inbox is a major nuisance. In other words, make Universal Search truly universal. Add Video Recording ASAP. Given that one of the hallmark features of the iPhone 3G S is the ability to record and share videos, Palm needs to get on the ball and issue an update that adds this capability to the Pre (the hardware is apparently capable). Video editing can come later. You just need to show that you’re in the game. Sharing via MMS would be a nice bonus, especially as AT&T won’t offer that feature until the end of the summer. Get That SDK Out The Door! Let’s face facts. The Pre’s App Catalog is lonely. And, although most of the apps there are pretty solid, fewer than 20 programs is not going to cut it against the 50,000+ App Store juggernaut. Palm needs to release its software developer kit while the Pre and its webOS are still part of the conversation. Once the next wave of Android phones hits and Windows Mobile regains its footing with version 6.5, developers could very well place Palm last on their priority lists.