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14 Aug 2009
Wall Street analysts are predicting a slump in US sales for the Palm Pre which could force the mobile giant to cut prices later in the year, according to new reports.
In a note to investors, Ilya Grozovsky, analyst at Morgan Joseph, is reported to have downgraded his rating of Palm from "Hold" to " Sell" because of poor sales.
July pre-sales were down to about 100,000 units, from 200,000 in June, said the note, with August set to be even lower than July. Grozovsky is also reported as revising down his estimate on Pre sales for the August quarter from 400,000 to 350,000.
“Should sales prove to be in line with our checks, we believe price cuts may be looming going into the holiday season in an effort to spur holiday sales of the Pre,” he is reported as saying.
“This could, in turn, hurt Palm margins as we believe that Palm will have to make price concessions to Sprint."
Palm hoped the Pre would revive its flagging fortunes in the mobile market when it launched but despite good reviews, its best days could well be behind it.
Ashok Kumar, analyst at Collins Stewart, is reported as saying that “due to weakening demand”, production of the device for the remainder of the year has been cut by 500,000 units.
It has been a bad week for Palm, with the firm also having to fight off suggestions that it collects too much information from users' devices.
The device is set to become available to UK customers before Christmas, with O2 chosen as the exclusive carrier.
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No surprise
Palm abandoned their primary customer base in an attempt to capture a more significant share of the market. Net result: Original loyal customers no longer have any interest in the company's products, as their newer products no longer work as well, or the same way as the reliable products they used to produce. The paradigm switch between their older devices and their newer made their devices useless to individuals such as myself. Unfortunately the direction the company decided to take was to try to enter a very competitive market among more established, trendy, and potentially better engineered products. As much as I hate to say it, it appears Palm is hell bent on self destruction, which is sad, as the company and products used to be leaders in their area.
Posted by: David Poole 14 Aug 2009
Palm Pre and I phone
Why sell these products through one service provider? I am happy with my mobile service provider and not prepared to switch to O2 to get the i phone or palm re. i phone and palm re have made a huge mistake by distributing their products through one carrier. In this instance 3 lost sales.
Posted by: Simon (UK) 14 Aug 2009