Deutsche Bank Gives Palm a Hand
by John Paczkowski
Posted on July 31, 2009 at 3:17 PM PT
Sales of the Palm Pre aren’t slowing; nor is the device suffering from unusually high return rates. And all this incessant hand-wringing over the Pre’s performance at market is needless.
That’s the word from Deutsche Bank analyst Jonathan Goldberg, who says the smartphone is doing just fine.
“Palm’s stock has underperformed since their earnings announcement last month in the absence of any hard news,” Goldberg wrote in a research note Friday. “We think market fears about return rates, weekly order trends and applications development are off the mark. Our checks continue to point to solid demand and carrier interest.”
According to Goldberg, his checks also indicate that “…Palm has become a healthy momentum stock adding to volatility. Sifting through the noise, however, we believe the key trends are healthy. The August quarter is tracking ahead of our estimates. We think the Street is still underestimating the company’s improved execution and long-term operating leverage.”
That’s certainly possible, given the wide disagreement among analysts over sales and satisfaction. Perhaps when Palm (PALM) next reports earnings, it will release some hard sales numbers and put an end to this speculation once and for all.
Comments
This is a great turnaround from yesterday’s “elevating” article. The update from your earlier claim of 40% returns down to 18% is more realistic for a new product forced into early release. However, the lower figure is still a little suspect since most satisfied customers never visit the blog pages and the bulk of the negative feedback is, most likely, from the jealous competitors who do not stand to profit from Palm’s success. In any case, I applaud your more positive, and fair, appraisal of Palm’s current situation. And, I agree we will not know the whole truth until the August figures are in.
Posted by Lee Meyer at July 31st, 2009 at 7:23 pm@Lee Meyer:
Forced into early release? Are you joking? You *must* be joking!
Posted by Alan Sanders at August 1st, 2009 at 2:23 pmWhere have you been while all of the many smart phones have been released so far this year? Were you sleeping when Apple released the new iphone for $199 or the updated older version for $99? What new product isn’t “forced into early release” in this competitive market? I’m sure everyone would love to have another month or two to work out the bugs, tweak the features and enjoy a leisurely waltz through QA.
Posted by Lee Meyer at August 1st, 2009 at 6:50 pm