Based on Palm's recent quarterly earnings, it's safe to say the company hasn't fully turned itself around yet. The Pre and Pixi are selling below expectations from Palm's single carrier partner Sprint. Will a new version of webOS spice up sales?The current version of webOS is a capable smartphone platform that offers a unique user interface. I happen to like webOS very much. I don't care for the Pre or the Pixi too much though, and it turns out neither do a lot of others.

According to Palm's recent earnings report, the company sold about 783,000 smartphones during its most recent fiscal quarter, which was down 5% from the previous quarter. That quarter, Palm had just one new smartphone -- the Pre -- for sale. This quarter it has two, the Pre and Pixi. You'd think the numbers would go up, not down. (For comparison, RIM sold over 10 million BlackBerries in its most recent quarter.)

The reality is, Palm needs to sell more phones.

Palm CEO Jon Rubinstein, however, quieted down talk of a new handset launching at CES. He said during the quarterly earnings call, "Our focus is around having a small family of really great products. Right now we have two great products in Pre and Pixi and our objective right now is to expand with more carriers and more regions." More carriers will certainly help. With Verizon employees already training on webOS, it appears likely that Verizon will soon be selling at least one of Palm's existing smartphones.

Rubinstein's comment makes it seem less likely that Palm will use the press conference it has scheduled during CES on January 7 to launch a new phone. Rubinstein did, however, confirm that a new version of webOS is on the way.

He said webOS 1.3.5 will "let customers download and store more applications, enhance Wi-Fi and application performance, improve battery life and increase Pixi's speed and responsiveness." The performance of the webOS does need a kick in the pants, that's for sure. It is a bit sluggish, especially on the under-powered Pixi.

Rubinstein didn't provide any more specifics about webOS, but I am sure this new version will offer more than a slight performance upgrade. Palm needs to bring new features to the table -- such as video capture -- and new hardware if it wants to really compete with Apple, Google and RIM.