Those Palm Pre Shortage Rumors Were True

June 8, 2009 by Rico Mossesgeld  
Filed under Cellphones, Trends

Why Palm, why?!? Isn’t your future dependent on how widespread the Pre becomes? How could you let manufacturing problems complicate the Pre launch? Why did you prove all those shortage rumors true?

Everything Pre last May 19: “Shortly after the announcement of a June 6th release date for the Palm Pre, Sprint’s CEO Dan Hesse indicated the company did not plan to spend much on advertising and expects supply shortages to develop. “We won’t be able to keep up with demand for the device in the early period of time,” said Hesse.”

Palm Pre Sold Out Courtesy of The Raw Feed

Palm Pre Sold Out Courtesy of The Raw Feed

PC World last May 23: “Well, now it’s time for the bad news, because Best Buy is rumored to have only 4250 units in stock for the Pre’s June 6 launch, according to BGR.

That’s a big problem since Best Buy will sell the Pre at almost 1000 of its Best Buy Mobile counters and specialty stores nationwide, leaving an average of just four devices per store. What Best Buy will likely do in this case is, just like Apple did during the early days of the iPhone 3G, direct larger quantities of Pre devices to higher population areas. That means if you live in a smaller city or rural area, you may be waiting a long time after launch day before seeing the Palm Pre on store shelves near you.”

Tech Trader Daily last May 26: “A little over a week before the introduction of Palm’s (PALM) “Pre” smartphone, Collins Stewart analyst Ashok Kumar re-emphasized today that Palm and its Hong Kong-based manufacturer Foxconn International are having problems producing high volumes of the Pre.

Kumar had been quoted a few weeks back saying the companies were experiencing various hardware and software problems. Sprint (S), which will supply service to the phone, has acknowledged there will be limited supplies of the Pre when it goes on sale June 6, and Best Buy (BBY) has said it will have limited supplies in stock. Kumar says that after checking with a source of his at Foxconn, he believes the supply of units at the introduction will be below even a reduced estimate of 150,000 units.”

And the kicker from Silicon Alley Insider (yesterday): “Palm’s (PALM) new Pre smartphone sold out over the weekend after going on sale Saturday. That’s mostly because of supply constraints: While a few Sprint Nextel (S) stores got hundreds of Pres to sell, most stores got less than 50 phones, and some even got less then 10.

Still, analysts estimate that Sprint and Palm sold 35,000 to 60,000 Pres over the weekend [a pretty wide range, don't you think?]. That’s very little compared to the 1 million iPhone 3Gs that Apple shipped in its first weekend last summer, but it’s not terrible. As expected, some 80% to 90% of early buyers were already Sprint customers, RBC’s Mike Abramsky estimates. He also pegs about 60% of early buyers as prior Palm owners.”

Ah well, I can only hope the negativity is proven unwarranted, as I rub my non-functional Palm Vx reassuringly, whispering hope to it. In any case, the launch shortage could actually help Palm, by making the Pre a more valuable commodity that only few currently have access to.

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