Smartphones make up 11 percent of all phones globally and 19 percent in the U.S., but those figures are expected to double by 2013, said Jon Rubinstein, Palm's chairman and CEO, during the company's fourth-quarter earnings call on Thursday.

"Only a handful of companies have the software and product design capabilities" to gain significant market share, he said. "There's room for three to five players in this space. We don't have to beat each other to prosper."

Palm began selling the Pre, the first phone to run the company's new WebOS software, less than three weeks ago. It faces tough competition from Apple's popular iPhone, as well as other recent entrants like Android. Rubinstein, one of the creators of Apple's iPod, took on his new role just two weeks ago.

He wouldn't say how many Pres have sold, but he did confirm that users have downloaded 1 million applications.

They may download at an even faster rate as Palm begins to slowly open up its developer community. For now, there are a few hundred developers who have the tools to build applications for WebOS, the new Palm software, but over the next few weeks the company will accept thousands more, he said.