By John Paczkowski
What a wonderful curative the Palm Pre has proven to be for Palm. Especially considering that the device has yet to ship. In early January of this year, the company’s shares were trading below $3, having been dragged deep into the mud by a string of nasty quarterly losses. Five months later, after the Pre's announcement at CES, they're trading at over $10. Read More »
Published on May 28, 2009
By Katherine Boehret
Palm offers the Pre's webOS operating system in a tinier package: the Pixi. Read More »
Published on November 17, 2009
The official price of Palm’s new Pixi smartphone is $99.95, but Wal-Mart is now offering the handset for $24.99 with a two-year contract, as is Amazon. That’s a 75 percent price cut. Staggering, considering the Pixi arrived at market just four days ago.
In preparation for the official launch of its new Pixi handset, Palm is rolling out a new ad campaign. It’s something of a departure from the ads the company used to tout the Pre, trading their alleged "ethereal beauty" and I-Am-The-White-Witch-of-Narnia-FEAR-ME spokeswoman for a more forthright pitch involving a crowd of friendly-looking hipsters enjoying a new "Alvin and the Chipmunks" mashup.
The Pixi, the Palm Pre’s diminutive smart-phone sibling, arrives at market a few days from now (Nov. 15), and despite some potential pricing confusion with the Pre, analysts expect it to be another catalyst for the company’s comeback. In a note to clients today, Bank of America/Merrill Lynch analyst Vivek Arya said Palm is well-poised for growth in 2010.
With Palm’s shares up more than 900 percent since January, they were destined to suffer a correction someday. And now it seems that day has finally come. Shares in the handset maker fell some 23 percent last week amid concerns about increased competition from Google’s Android operating system, which is being rolled out on a number of devices at a variety of carriers, including Palm partner Sprint.
Like we didn’t see this one coming. Among the new features of Apple’s iTunes 9 media software is one that wasn’t announced this morning: An update that prevents the Palm Pre from synching with it.
Apple rolled out iTunes 8.2.1, a minor point release of its popular media software that provides "a number of important bug fixes and addresses an issue with verification of Apple devices." And devices masquerading as them. Like the Palm Pre.
Are sales of the Pre slowing or not? Without official numbers from Palm or Sprint, it’s nearly impossible to tell. But that hasn’t stopped analysts from taking a stab at it. Earlier this week, Pali research claimed Pre sales were tapering off. Now Pacific Crest is saying they remain “robust.”
Post-Pre launch, Palm may be, in the words of CEO Jon Rubinstein, "exactly where we hoped we would be." But how long the company will stay there is an open question. Because according to Pali Research, Pre sales slowed again last week.
Palm seems to have satiated pent-up early demand for its new Pre smartphone, constrained supplies be damned. In a pair of investor notes issued today, analysts at Pali Research and JP Morgan say that sales of the Pre have tapered off to a point where supply and demand are roughly in parity.
During its post-earnings conference call last Thursday, Palm refused to say how many Pre handsets have been sold to date. Or how many it believes it will sell in the first quarter of production. The company would say only, in the words of CEO Jon Rubinstein, that “sales have been strong and growing.” So until Palm provides specific Pre sales figures, we have only the estimates of analysts with which to gauge the device’s impact on Palm’s moribund smartphone franchise. And the latest estimates, from Edward Snyder at Charter Equity Research, suggest that the impact is great.
Well, here’s a nice data point to consider in advance of Palm’s earnings tomorrow. The company’s Pre App Catalog, which has been widely criticized for its paltry selection, just reached one million downloads.
It’s been three weeks since the Palm Pre debuted and Sprint is still having trouble keeping it in stock. This according to Sprint Nextel CFO Bob Brust, who says that supplies of the new handset continue to be tight and that Apple’s new iPhone 3GS hasn’t really had an impact on sales.
Palm has shipped 100,000 Pres since the device debuted on June 6. This, according to J.P. Morgan analyst Paul Coster, who estimates that more than 50,000 phones were sold in the first two days it was available and says the company may have sold another 50,000 in the days that followed.
Now we know why it was Palm executive chairman Jon Rubinstein and investor Roger McNamee on stage at the D conference last month talking up the Pre, and not CEO Ed Colligan: Colligan was on his way out. On Wednesday, Palm tapped Rubinstein as its new CEO.
Palm picked a hell of a day to launch the Pre. Two days before Apple’s World Wide Developers Conference. Two days before the unveiling of the iPhone 3G S, a new version of Apple’s iconic handset that runs twice as fast as its predecessor, shoots video with an improved three megapixel camera and boasts longer battery life and greater storage. And worst of all, two days prior to the announcement of a new $99 price point for the iPhone 3G, a disruptive move that puts the device in reach of far more consumers.
The Pre, Palm’s new bet-the-company handset, had a successful debut this past weekend. It sold out in hours at most locations on strong early demand, though limited supplies virtually ensured that would be the case. Sprint’s flagship Manhattan store had 200 units at launch. Its store in Boston’s Back Bay area had only 55. Another in San Francisco’s Mission district had 60. And some Best Buy locations reported having just 2 to 4 Pres on hand when their doors opened Saturday morning.
The Palm Pre officially went on sale this morning, and judging from initial reports--and my experience at a local northern California Sprint store--neither demand or supply was particularly overwhelming. Certainly, lines for the device were far shorter than those that extended from Apple stores for the launches of the iPhone and the iPhone 3G. Arriving outside my local Sprint store about an hour after they first opened, I found not a queue of eager Pre-buyers, but two kids making forts out of a few Pre shipping boxes left outside the store.
When Verizon Wireless CEO Lowell McAdam claimed his company would be selling the Palm Pre six months from now, he was apparently as full of it as a dairy farm manure spreader. At a Palm Pre launch event in New York city, Sprint CEO Dan Hesse dismissed McAdam’s claim as inaccurate.
If these rumors of shortages prove true and you don't manage to get a new Palm Pre this Saturday, here's the video you would have seen the first time you activated the device.
Last week at the All Things D conference, Palm investor Roger McNamee made a point of touting the Pre's supposedly female-friendly attributes -- like the fact that it has a mirror on the back. No mention of the shiny surface in this first TV ad touting the new phone, but this one certainly seems geared toward the xx set. Or maybe Palm has been stung by accusations that it's an Apple ripoff and wanted to come out with some distinctly un-Jobsian marketing.
The Palm Pre debuts this week. Next week, we should hear about a big update for Apple's iPhone. And by the end of the summer we'll have new phones running Android platform. So who's going to emerge as the winner? Easy, says Citigroup analyst Mark Mahaney: It's Google. But Mahaney isn't talking about Google's smartphone platform. He's talking about Google's core search business, which he thinks is finally about to see significant lift from mobile users.
If it is the Pre that will decide Palm’s fate in the smartphone market, if it is truly the bet-the-company device that it’s described as, then Palm has made a good bet and the company’s going to be around for some time to come. The early reviews of the Pre are in and they are, to a one, glowing -- with some caveats about a poor battery life and a small selection of apps. The gadgeterati's verdict on the device, after the jump.
... The battle that’s going to be fought is not about hardware, but software.”
The Pre eats iPhones for breakfast.
– Roger McNamee at D7
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