According to Tech Crunch, a trusted source at Palm tells them Palm has a second WebOS phone that's smaller than the Pre coming out this year. According to the source, Palm is "very far along" on a second WebOS device and currently has plans to put it on the market in late 2009.

This is welcome news for some, but we'd be much happier with a larger device. Palm has been making devices with smaller screens while everyone else is trying to make larger displays.