Palm webOS 1.2 Debuts Sans iTunes Sync

Palm today released the first major update to its mobile platform webOS, an upgrade that includes support for paid apps in the Palm Catalog store and over-the-air downloads from Amazon’s MP3 Store.

Also noteworthy in Palm’s (NASDAQ: PALM) webOS 1.2 is what’s missing — the ability for the Palm Pre to sync directly with Apple’s (NASDAQ: AAPL) iTunes software.

The two rivals had been involved in a back-and-forth standoff over the feature, which allowed the Pre to pose as an iPod by using the iPod’s vendor identification number, and therefore transfer content through a direct link iTunes, rather than through third-party software as other devices do.

Palm launched the Pre with direct iTunes sync, touting it as a major feature, but Apple responded by blocking it with the next version of its iTunes software. Palm replaced it when it updated webOS shortly after, only to see Apple disable it again with the Sept. 9 release of iTunes 9.

During that time, Palm asked the USB standards group to make a ruling on Apple’s moves, claiming the iPhone maker was thwarting competition and therefore violating the USB Implementers Forum compliance agreement. Palm’s strategy backfired, however, with the USB board ruling that Palm was at fault.

But with webOS 1.2’s over-the-air download support for Amazon’s music store, the issue may be moot, as it could signal that Palm is now focusing on an alternative to a direct sync with iTunes.

The integration with Amazon’s music store works over both WAN and Wi-Fi, which means users can purchase digital music directly from the Pre over Sprint’s 3G network, as opposed to being connected to a computer through the USB port. This is the same method iPhones and iPod owners use to buy content from iTunes.

Meanwhile, with the release of webOS 1.2, Palm is allowing users to create a profile in its App Catalog and enter their credit card information, paving the way for the service to become a marketplace for paid apps. At present, however, the App Catalog is still in beta and only supports free downloads.

Other key features of the update include support for cut-and-paste functionality for e-mail and Web pages, LinkedIn contact syncing and the ability to download files within the browser.

The news of Palm’s platform update comes as the company, once a pioneering leader in the wireless handheld market, pins its hopes for a come-back bid in the mobile sector on its nascent webOS ecosystem.

To date, this includes the flagship Pre, launched in June, and its smaller sibling, the Pixi, due out next month, as well as the App Catalog store.

Over the past few years, Palm lost massive market share to Apple and Research In Motion (NASDAQ: RIMM) due to its failure to introduce any compelling new handsets and flagging sales of the outdated Centro and Treo.

Leading the effort to revitalize the Palm brand and return the company to profitability is CEO Jon Rubinstein, who was integral in creating the iPod during his stint as an executive at Apple.