Smartphone-starved Sprint customers have been gobbling up Palm Pres (PALM): One analyst estimates that almost 400,000 have been sold so far in the past 5 weeks.
So are we backing off our prediction that the Palm Pre will bomb? No!
Thanks to the work of our mobile analyst Dan Frommer, we were persuaded that Palm would initially sell a boatload of Pres merely on the strength of having a captive Sprint audience desperate for something that vaguely resembled the iPhone.
The Pre is still no iPhone, however, and it’s especially no NEW iPhone, and it’s worth keeping the 400,000 Pres sold in context: Apple sold more than twice that many new iPhones in a single weekend.
Over time, we still think the smartphone game is becoming a platform play, and Apple, RIM, and even Google have huge leads over Pre as development platforms. The world doesn’t need FOUR major handset platforms. It probably doesn’t even need two or three. So, long-term, we still think the Pre will bomb.
Eric Savitz of Barrons: Channel checks suggest Palm (PALM) Pre sales into the channel in June were above 300,000 units, according to Charter Equity Research analyst Ed Snyder, plus an estimated 70,000 in May. Snyder contends that the company has yet to catch up with demand.
He says start-up problems with manufacturing and uncertainty about initial demand limited the number of phones in stock at launch to about 120,000 units – and that the inventory was sold in a matter of days.
Snyder contends the company is now producing about 15,000 units a day, and likely will ship nearly 1 million phones to Sprint in the first quarter of production, “well above consensus.”
Meanwhile, Snyder asserts that a WCDMA version of the phone “appears imminent,” which he says will mean the company will reach cash flow break even sooner than expected. He thinks the company will launch a WCDMA Pre with Telefonica in September, with volume shipments before the holiday selling season. He adds that a Telefonica launch, combined with Sprint and the already announced planned roll-out by Bell Mobility in Canada, should drive sales above 1 million units a month.
As for the potential for relationships with other U.S. carriers, he contends that the exclusivity arrangement with Sprint only covers the Pre – and not other WebOS devices. He expects a non-Pre WebOS-based device to launch with Verizon in early 2010, and a WebOS-based “Centro like” device with AT&T soon after that.
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