Analyst: Palm sold about 50,000 Pres
How did Palm's (PALM) Pre do in its first weekend of sales?
In a report to clients issued Monday morning, RBC Capital's Mike Abramsky offers some numbers.
Based on his "channel checks" — presumably a survey of Sprint (S) and Best Buy (BBY) retail stores — Abramsky estimates that Palm sold somewhere between 45,000 and 55,000 Pres last weekend ,and put another 10,000 to 15,000 would-be customers on waiting lists.
Apple (AAPL) and AT&T (T), by contrast, sold 270,000 iPhones in that device's first two days of sale (Friday and Saturday, June 29 and 30, 2007).
A year later Apple sold 1 million iPhone 3Gs in less than three days — although analysts estimate that more than half of those sales were in overseas markets.
Palm's sales were limited to U.S. retail outlets and were severely constrained by short supplies. Store representatives told Abramsky that their initial inventories ranged from 5 units to 80+ (average: 25-45 per store), which sold out within the first one to three hours.
The reps were not at all certain when more supplies would be coming in, although most expected to get them "sometime next week."
Among Abramsky's other findings:
- An estimated 80-90% of early Pre buyers were Sprint customers, some upgrading from flip phones, others from HTC smartphones or Research in Motion (RIMM) BlackBerries
- An estimated 60% had previously owned Palm devices
- The features that attracted customers to the Pre included "its sleek [user interface], Web browser, physical keyboard, multitasking, and side-loading with iTunes"
- Battery life and limited apps (shortcomings highlighted in early Pre reviews) did not seem to deter early buyers.
Abramsky believes Palm is on track to sell 470,000 Pres in its first quarter and 2.6 million units in its first year.
"Forward catalysts for [share] growth and valuation," he writes in analyst's telegraphese, "include distribution expansion, additional product launches, visibility to breakeven, and smartphone market growth…
"Valuation could be near-term volatile on: a) competitive launches from Apple, RIM, Android; b) possible litigation concerns; c) launch or subsequent execution issues (e.g. shortages, quality, support, etc); d) speculation over future carrier launches."
Abramsky is sticking with his "outperform" rating for Palm and a $14 price target. Shares closed Friday at an even $13.
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Abramsky's report seems about right. I'm not sure about his prediction of over 2M Pres being sold this year. I think 1M to 1.5M is more likely.
Ultimately, the problem is finding their niche. It's more likely to take BB and Android sales, than iPhone sales.
To think the iPhone is about the hardware is to exhibit your ignorance an misunderstanding of the product.
Just as with the Mac vs. Windows, it's the software that makes the "wow factor". The hardware is merely a facilitator.
The new camera is video capable. It's the software that lets you instantly share to YouTube. And so on and so forth.
I'm astounded that there are folks who think that a device running HTML-based dashboard widgets (but which the device mfcr's mktg dept calls "applications") is somehow a leap forward from the iPhone. Truly ignorant.
Apple people are Apple people. The think themselves on the bleeding edge of technology but in fact what the the newest Iphone bring?? A better camera, more memory and a slightly faster processor. Hmmm and the wow factor is where? The Pre is innovative, the Iphone is still a touch with a phone.
Even if you take into account the economy shift, selling 50,000 phones is still only about 20-25% of the original iPhone sales. That is not a number to brag or feel confident about if you are trying to market your product as an iPhone "killer." If they had sold 50% or better, then you can say it's the economy.
I am a Sprint customer and went to a Sprint store on Sunday to try the Pre. Didn't like it; felt like cheap plastic, keyboard was very small for my fingers, and it's a really small device – not good for watching video, also the limited landscape ability. Only thing I liked was the OS, that is quite nice. With the 32GB iPhone and major hardware and OS upgrades – Sprint has me for about another month then I'm out.
The guy at the Sprint store bragged about how all the stores in this area were sold out. But selling out if you only started with 8-25 phones, again, nothing to brag about.
To anonymous and James: Did these job losses stop Apple from selling 3.9 million 3G iPhones last quarter, 4.3 million the quarter before, and 6.9 million in the first quarter it was offered?
So, in my impression, that economic argument is a bit silly, especially when we know that smartphones are growing by 20% a year, which is an average spread across all the entire category. The best and most functional models will have growth rates of 100% or more.
Thus….iPhone.
The release was certainly interesting. I stopped in a Sprint store in Phoenix Sunday afternoon just to look at a Pre. I read a lot about it and thought it would be perfect for me. My contract with Sprint was up on May 1st.
I held the phone, messed around with some of the applications, and made the decision to go ahead and give up my Blackberry and buy it. The salesman told me he had one phone in stock – my lucky day!!
Not to be… The one phone in stock was reserved in case a non-Sprint customer wanted to switch carriers.
I stuck with Sprint through all kinds of problems in the past – poor coverage, bad customer service, and monthly bills that took forever to get straight… then, I'm treated like that!!
AT&T and the new I-Phone… I'm on my way!
With the way economy is compared to now to how it was in 2007 shouldn't even compare just kinda dumb to do that. heck I would not even buy the newest phone inless it under 100 bucks right now.
iPhone aside, Pre's troubled launch is nothing short of miraculous in a time where 600000 jobs are lost every month. Pre with its OS and QWERTY keyboard and fantastic unified eMail inbox is going to be a blackberry killer. Millions of consumers would ditch their blackberries in favor of the fantastic Pre All Inclusive plans. We already did.
When the Pre connects with Verizon, then I'm in! Forget Sprint.