Monday, June 8, 2009
Area Best Buy Reports Overwhelming Demand for 4 Palm Pres
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.
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.
One of the simplest ways to create a shortage, and the buying frenzy that typically accompanies it, is to announce that there will be one. And this is precisely what Sprint CEO Dan Hesse did for the Palm Pre Tuesday. Speaking at J.P. Morgan’s Global Technology, Media and Telecom Conference shortly after Sprint announced the handset’s street date, Hesse said he anticipates that supplies will be limited, at least initially. 
The great truism about rebates is that anything less than 100 percent redemption is free money for the companies offering them. That’s something Palm and Sprint are clearly counting on as they bring Palm’s new Pre handset to market with a $100 rebate.
Here’s the flip side of reports that Palm plans to deliberately keep supplies of the Pre artificially low to foster the perception of a shortage and spur demand: There will be a shortage, but it won’t be deliberate or artificial. Collins Stewart analyst Ashok Kumar claims that his supply chain checks indicate that Palm has “drastically reduced its production orders” for the Pre.
Palm hasn’t yet set its price or launch date, but it already has a winner on its hands in the Pre. That’s the word from RBC Capital analyst Mike Abramsky, who gave the device one hell of a write-up this morning. Seems Abramsky, who had previously been neutral on Palm, now believes the company has a chance at “smartphone leadership.”
Roger McNamee’s hyperbolic predictions about iPhone-to-Pre conversion rates didn’t go over too well at Palm. Appalled by McNamee’s inflated, indecorous claims about its forthcoming smartphone, the handset maker on Monday filed a Free Writing Prospectus with the SEC that distances the company from McNamee’s claims and categorically refutes his your-next-iPhone-will-be-a-Pre foolishness. em>That was CRAZY talk, Roger
Palm investor Roger McNamee isn’t drinking his own Kool-Aid, he’s drowning in it. In an interview with Bloomberg, McNamee–co-founder of Elevation Partners, which owns 39 percent of Palm–claimed iPhone owners will switch en masse to the Palm Pre when their contracts expire.
Though Apple COO Tim Cook didn’t mention any companies by name in his recent warning to those who would take liberties with Apple’s intellectual property, it was clear to whom he was referring: Palm. Well, if Palm was shaken by Cook’s remarks, it’s not letting on. Asked if such aggro rhetoric worried the company, a Palm spokesperson said not in the least.
Lots of chatter this past week about the Palm Pre and the Web OS on which it runs–most of it overwhelmingly positive, if not euphoric. Clearly, Palm is on the mend. Still, the fact that the company is entering a market characterized by fierce competition and a furious pace of innovation puts it at an enormous disadvantage. Further, to stage a comeback, it needs a thriving developer ecosystem. And by some accounts, Palm’s developer ecosystem is in disrepair. 
