PALM Investors Await “Pre”-lude
By Zacks Investment Research on June 23, 2009 | More Posts By Zacks Investment Research | Author's Website
This week Palm, Inc. (PALM) will announce earnings for the year ending May 2009, and we should get some comments on the initial sales of the Pre.
Industry comments on sales so far in June have been less than complementary. Sales were restricted due to an attempt to foster interest and demand. However, the lack of product may have been due to a supplier having yield problems on a critical chip rather than a marketing ploy by Sprint (S).
Comments that certain stores had less than five units for sale on opening day, delivery is 10 units a week to stores and units are available at a large number of Radio Shack (RSH) stores suggest that initial demand is less than exciting. Reports on Sprint’s subscriber base are not encouraging, but a reduction in churn with existing subscribers buying the Pre would be a positive.
In our opinion, sales are from existing Palm customers and Apple (AAPL), Research In Motion (JOE) and Nokia (NOK), all of which have new smart-phones in the market, have not lost market share. However, the smart-phone market is growing and getting bigger, and even a small share of this market would be significant to PALM.
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