Palm Pre May Sell Less Than Half What The iPhone Sold In Its First Year
The Palm (NSDQ: PALM) Pre may have managed to muster considerable buzz before its impending launch–the exact date which has yet to be announced–but according to Bloomberg, Palm may end up selling fewer than half as many Pres as Apple (NSDQ: AAPL) sold iPhones when the device first launched. Though Palm
So what if they sell about half as many Pres as Apple did iPhones. That will still translate into a decent number of sales for Palm. Focus less on being an iPhone killer and keep the Palm Pre as a handset that will bring revenue into a struggling company. Apple is a behemoth compared to Palm and yet Apple is still having to fight to get iPhone acceptance in Asia. Apple is being dissed by India, China, S. Korea and Japan. The near future outlook isn't very good, either. Apple is not willing to give up any control and I think they're right.
A company such as Palm could probably make a few concessions and flood those countries with Pres. You never know how quickly things can be turned around.
Since Palm sold 2 million Centros in less than a year, (the second million in 4 months) I am pretty skeptical about these predictions. It may not hit the 6 million mark but it should at least double what the Centro did.
I don't know where these guys come up with 5 to 8 million units to return to profitability… they don't include the math. For estimates I have seen with the assumptions and math included the number is a lot smaller less than half of this. These numbers may be what would be required to retire all debt, which no ongoing company is ever going to do. Also does not say if they have picked up on Palm's new accounting treatment of revenue which effects the bottom line but not cash flow, which is much more important in valuing a business.
@labilliyboy -
That's the great thing about being an analyst, there's no accountability. When have you ever seen a scorecard about how an analyst projections panned out after the fact? That actually would be a useful service but one that the analyst would hate as it would show just how wild their predictions really are.
I will bet anyone that a Chimpanzee could randomly pick a group of stocks and and beat the average analyst on Wall Street. I am not kidding. As much as I like Cramer and listen to some of his shows he is included in my group against the Chimps. Cramer and company have a lot of interesting things to say which are factual however to benefit from his shows you need to decipher the facts from his subjective opinions. When the Pre is launched, if it can perform as well as it did at the CES, there will be no doubt as to how successful it will be, however one needs to understand it will not have the same results as the iPhone only because the iPhone was introduced into an environment without any competition. According to industry experts the Pre is a superior device, even when compared to the iPhone and quite possible could be a game changer but it will take longer to garner traction like the iPhone only because many Smart phone users will just not need to go from a good Smart phone (iPhone) to a better Smart phone (Pre). Nevertheless, IMHO time will manifest that the Pre is unequivocally the best Smart phone in the market and should have no problem surpassing the iPhone when it comes to critical mass within two years. Currently it appears that demand for the supply of the first tranche of Pres will be gobbled up within the first week of its launch. The reviews from this first set of users will be paramount to how well the phone does. Again if it performs close to anything shown at the CES this thing will fly.
It would definitely be difficult to increase their sales during this economic crisis. Will the predictions of the 10 analysts come true? Well, definitely, weâll just wait and see for results!
Hm, estimating the units needed to return to profitability without knowing the BOM, the production cost, the price or the subsidy is… mysterious.
According to the statements by the Palm CEO the Pre will be at least as expensive as the iPhone (most journalists interpreted his remarks as them targeting an even higher price) â this would render comparisons to the Centro obsolete, but likely lower the units needed to be profitable while limiting the potential buyer base (no idea by how much). Betting on existing Palm users might not be a good measure… the Pre will not run any existing software and it is a completely different device… conservative Palm users might find the Bold (or other RIMM devices) less diverse, actually equivalents for most best-selling Palm OS applications are available on the iPhone, now. Certainly the Pre will sell quite a bunch, but there are far too many factors to make that number predictable… we should have a better idea once there are a shipping date, a price and published tariffs.
The Pre is a game changer for Palm. By that I mean that none of their previous users and developer base will necessarily migrate to the Pre because of the differences in OS and software. Very similar to Apple when it switched from Apple II to Macs. They couldn't bring their rather substantial Apple II user base with them. Unfortunately Palm doesn't have many other revenue streams right now, after frittering away precious time and money on things like BeOS and Folio. And Sprint? Sprint!?! That was the best they could do and only in the U.S.A.?
Be interesting to see if Sprint allows Pre users to have the exact same "all-you-can-eat" plans as the rest of their smartphones.
I'm not going to wait and hope it ends up on VZW. I'm going to switch to Sprint for this phone (assuming its a solid phone and works like it was demo'd)
Palm is in a very tough position. When Apple came out with the iPhone there was little direct competition. Since then they established the App Store and worked the kinks out of that. This summer they ramp up the competition with OS 3.0. Palm is coming late to the party. Purely from a marketing viewpoint they need to introduce a phone which is dramatically better and eye catching in order to get people to even notice them.
Apple has around two hundred stores in great locations where you can not only see the iPhone but you can get free support. Will Palm hit the ground with this level of support? Apple and RIMM and others have established App Stores, Apple's being the most sophisticated and well stocked. Will Palm hit the ground with something like that? Palm is going to have a very tough time of it. Sure, they can get some sales from the fans and people who follow technology, but they will have a tough time penetrating the larger market.
If palm sells a million, it'll be amazing -bottom line, even if it is a better phone, it's a) not a better phone experience (ipod/iphone ecosystem, itunes, etc ..) and b) the Pre is NOT a quantum leap from iphone to smartphone as it was in 2007 – plus they are essentially out of money – Sprint also doesn't help … also, why is it called a PRE? Pre to what? Yea, it looks like in two months, they'll be running into the arms of Dell.