Leading up to Palm’s announcement of the launch of its new Pixi smart phone many wondered if the company would sign on to another initial exclusive with Sprint or go with larger rivals AT&T or Verizon.
Credit Suisse analyst Deepak Sitaraman said in a report this morning that he expected the launch to be with AT&T or Verizon, which caused him to make a significant cut to his Palm unit estimate for 2010 — to 6 million units from a previous estimate of 8.1 million. Here is his reasoning:
- Once AT&T and Verizon start selling the phones they will likely not market them as aggressively as if they had been on board since the launch.
- There is little visibility on when the Pixi will be released on AT&T and Verizon (Sitaraman says perhaps 2H10).
This leads Sitaraman to believe that the North American roll-out of the phone will likely be slower than expected and that his estimate of 10% smartphone share at AT&T and Verizon was too optimistic.
Of course, this all hinges on the fact that Sprint is a distant third to AT&T and Verizon in terms of wireless subscribers. Verizon’s 90 million and AT&T’s 80 million give them a commanding lead over Sprint, which reaches about 50 million subscribers.
So, given the difference in market share, anyone expecting the Pixi to be launched on Verizon or AT&T will likely have to lower their expectations for sales in 2010.
Investors appear to be taking notice — Sprint shares are down 3% so far this morning on fairly heavy volume.
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