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Can Palm Pre Show iPhone-like Sales?

Posted by: Olga Kharif on May 1, 2009

In today’s note, USB analyst Maynard Um examines an interesting possibility: What if Palm Pre, a device expected to hit Sprint Nextel stores shortly, sells as well as the legendary Apple iPhone?

Under this assumption, Palm could ship 865,000 units in the quarter ended in August, according to Um. The device is expected to start shipping in May or June. “We raise our target [for Palm’s shares] to $11 from $7.30 but maintain our Neutral rating as we think a fairly successful Sprint launch is priced into shares,” Um writes.

Here’s my two cents: While Pre is, by all accounts, an attractive phone, UBS’s figures seem a bit high. Here’s why: The Pre will be coming out just when Apple’s new iPhone will be making its debut. The iPhone launch is sure to attract many first adopters who might have opted for the Pre, were it to launch in a different quarter.

What’s more, consumers don’t buy that many cell phones in summertime. Thanksgiving and Christmas are the big shopping months. Even during the hot holiday season, selling that many phones is hard. After becoming available in the U.S. last October, another highly anticipated phone, T-Mobile G1, sold 1 million units through mid-April. G1 sold 1 million units over nearly two quarters. I don’t see why the Pre should be more popular than the G1 — and in an off-season quarter, too.

Reader Comments


May 1, 2009 7:52 PM

"I don’t see why the Pre should be more popular than the G1 — and in an off-season quarter, too."

Very clearly here, Ms. Writer knows little to nothing about the Palm Pre, or the phone market for that matter.

The reason that it took T-mobile 2 quarters to reach 1mill. sales for the G1 is that it got very mixed reviews. It has a clunky aesthetic, and it's bulky compared to both the iPhone and Palm Pre. In addition to that, it had no multi-touch. A poorly implemented touch screen is the reason the Storm, G1, and Epix all failed to take hold against the iPhone. Beyond the tech, the software has to power the user's experience, and none of these phones had good enough software to compete.

Now, the Pre has everything technologically that the iPhone has and more. It has a capacitive multi-touch screen, a butter smooth, intuitive OS, and it has a full keyboard, so all the texters out there can escape Apple's BS solution of "no physical keys". I have the iPhone. It's very disappointing. I will be switching to the Pre because of the keyboard, slick OS, and true multi-tasking. For me, having all the cool apps on the iPhone is pointless when you have to close them all to use a different one.

When I'm driving in my car, I like to listen to Pandora. Unfortunately, Apple deemed multi tasking unworthy of their shitty hardware, and now, I have to close my music player any time I want to use the maps. On Windows Mobile, I did not have to do this.

So, the Pre fixed this. Music, text, web, maps, all at once. Oh, and copy and paste. That's another big one. Apple only announced that this year after the Pre. They're very clearly scared of a direct competitor (and no, the Storm and G1 are not direct competitors for the reasons listed above).

So, bring it on Palm, I will craigslist my POS (but MINT!!) iPhone 3G so fast...


May 15, 2009 3:59 PM

I am a huge Apple fan but have resisted the iphone due to the AT&T contracts. I had a plan with them years ago and was so unhappy. Sprint is a much more customer friendly company. I cannot wait for the palm pre, I intend on buying it as soon as it hits the market.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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