Print 15 comment(s) - last by aqwan135.. on Dec 20 at 8:30 PM

Sprint sold less Pre and Pixi handsets than expected

Palm has been trying to turn its smartphone fortunes around with webOS devices like the Pre and the new Pixi. The problem in many eyes is that the innovative features webOS devices offered when first seen in January 2009 at CES were common on other smartphones once Palm finally got around to launching the Pre.

The launch of the Pixi running webOS in October gave Palm a less expensive smartphone for consumers to consider, but didn’t help Palm gain as much as it had hoped. Palm has reported a larger than expected quarterly loss for fiscal Q2 after revealing that Sprint has sold less of the Pre and Pixi handsets than Palm expected.

Palm shares dropped 7.7% in trading after the news was reported. Palm also reported a larger than expected loss of 37 cents per share compared to the analyst predictions of a 32 cents per share loss.

Palm is pointing the finger at other devices available on the Sprint network like Android phones from HTC and Samsung for the less than expected demand for its smartphones. Palm says that it shipped 783,000 smartphone units over the quarter, which is up 41% compared to last year. However, only 573,000 of the phones shipped ended up in consumer hands meaning that Sprint has a huge stockpile of the devices sitting in its stores unsold.

The introduction of the Pixi also drove the average selling price of a Palm handset from the $427 point last quarter to $375 this quarter. Palm still maintains that it will reach its predicted fiscal 2010 revenue forecast of $1.6 to $1.8 billion. Analysts are wondering when Palm will break the Pre and Pixi free of the less popular Sprint network and move it to other more popular networks.

Analyst Shaw Wu from Kaufman Bros. said, "Number one, when do they sign more carriers beyond Sprint here in the U.S? At what time can they leverage their spending?"

The smartphone market is very competitive and a new report issued this week found that Microsoft's Windows Mobile is the only OS in the smartphone realm losing marketshare. The report also has the iPhone in second place overall with RIM in the clear lead in the market.

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I'd buy one
By djc208 on 12/18/2009 12:17:35 PM , Rating: 2
But I can't have a camera phone at work and they don't offer non-camera options for either the Pre or Pixi. The only non-camera smartphone option out there is Blackberry and I can't bring myself to buy a Blackberry when I could get a Pre for the same price (or less).

Seriously though, while I have Sprint and have been satisfied with them it's in Palm's best interest to get onto other brands as well. I would agree that they need to re-tool their marketing campain and push the benefits of the WebOS. The app thing needs to be remedied quickly too.

The big advantage I see over WebOS and the iPhone over the Android phones is that the OS support should be better over the long run. A Pre should be expected to continue to get OS updates into future generations like the iPhones. I'm worried that the Android OS will end up fractured like with the Windows Mobil OS where many times the only way to get the new version is on a new phone. While most people replace their phone every two or so years it's still nice to know you don't have to just to get fixes and updates you should have gotten on your current phone.

RE: I'd buy one
By Flunk on 12/18/2009 12:40:25 PM , Rating: 2
Buy one and yank the camera, it's very easy. It's preitty close to impossible to find a smart phone without a camera these days anyway.

RE: I'd buy one
By retrospooty on 12/19/2009 9:41:21 AM , Rating: 2
If you work in a secure environment, you can't just rip out the camera.

Sure you can theoretically do it, but for a company or govt. lab to ask who knows how many security guards inspecting everyones phones on the way in every day to make sure the camera function doesn't work on dozens of different models that people might do this on isn't realistic and wont ever happen. They have to go by simple rules that can be easily enforced at inspection... and the rules are simple - no cameraphone models, period.

RE: I'd buy one
By mcnabney on 12/18/2009 12:41:25 PM , Rating: 2
I wouldn't expect any more WebOS updates after Palm files for bankruptcy next quarter. I think Android has the brightest future. Have you noticed that the Android App store has doubled from 10k to 20k programs in the last 45 days? With the avalanche of Android devices slated for 2010 it is going to turn into a decent market with three strong competitors (Apple, RIM, and Google). Palm will drop next and WM will become less and less relevant.

RE: I'd buy one
By cludinsk on 12/18/2009 2:56:24 PM , Rating: 2
yeah, kind of sad how palm frittered away a lead in handhelds which should have translated to a lead in smartphones. the pre/pixi is probably their last hurrah.

RE: I'd buy one
By aqwan135 on 12/20/2009 7:56:59 PM , Rating: 1

fr ee sh i pp ing

(jordan shoes) $32

(air max) $34



RE: I'd buy one
By aqwan135 on 12/20/09, Rating: -1
Not Unexpected
By clovell on 12/18/2009 11:55:47 AM , Rating: 2
Sprint has the best value plans, by far - particularly when it comes to data. The Pixi isn't at a bad price point, but the Pre is - especially relative to its peers. From a market penetration perspective, the Pixi would be better priced at $79.99 and the Pre at $99.99. And the touchstone charger is just a bit ridiculous - drop that to $44.99 and it'll sell.

Palm came out swinging hard, but they have to get used to not being the only game in town. They have got to be more agile in order to stay competitive.

I expect that, after this holiday season, sometime in early '10, we'll see those price points met. I'm also starting to see commercials that don't suck (i.e. the new Pixi commercial). The old ones seemed to be in the same style as the new Prius commercials, which are great when you're on your 3rd gen product and have built brand name over the last decade.

RE: Not Unexpected
By melgross on 12/18/2009 2:44:28 PM , Rating: 2
People don't seem to like the Pre, Pixi and WebOS. While the tech sites and reviewers love stuff like this, and were looking very hard for something to counter the iphone so they'd have something new to play with and talk about, consumers don't feel the same way.

Reports of poor hardware, and the fact that WebOs isn't as user friendly as the iPhone OS in that you need to know how to use it before you can use it properly, which isn't true for the iPhone, turns people off.

In addition, they're making it difficult for developers, despite all the talk about it being "more open" than Apple's app process. 500 apps after all this time is another reason why people are staying way.

Their really bad advertising didn't help either.

The fact that it's on Sprint isn't an excuse. They could have sold twice the number, or four times the number if people liked it. The problem is endemic to the phones themselves. Sales at the UK's Q2 are below expectations as well.

Sprint has cheap plans because they losing customer is large numbers. They have to do something, and that's their choice.

RE: Not Unexpected
By omnicronx on 12/18/2009 5:36:50 PM , Rating: 2
People don't seem to like the Pre, Pixi and WebOS
Hmm that's funny, because I don't know one Pre owner that has been disappointed with their purchase.

Being tied exclusively to Sprint has hurt the Pre, there is no debating this. Like it or not, many peoples phone decision lies with the network that it is on. Even the 'great' iPhone has this problem, there are countless verizon users that won't jump ship because of the terrible AT&T network. For example Apple just dropped their exclusivity in France and their sales went up two fold. Same thing has happened in Canada with similar(but not as much) results expected.

RE: Not Unexpected
By bplewis24 on 12/19/2009 3:52:09 PM , Rating: 2
Like it or not, many peoples phone decision lies with the network that it is on. Even the 'great' iPhone has this problem, there are countless verizon users that won't jump ship because of the terrible AT&T network.

You just described me exactly. I was very interested in the Pre, but had refused to leave Verizon. In fact, even though my "New Every Two" Phone Upgrade kicked in back in July of 09, I had decided to wait to use it until January of 2010 to see if the Pre would come to Verizon's network.

When the Droid came out I decided to not wait any longer, and since it seems that Palm has doomed the Pre (and possibly the company's) long-term success by tying it exclusively to Sprint for at least the first 6 months, I feel I made the right decision.


By rjwerth on 12/19/2009 4:26:54 PM , Rating: 3
Seems to me, most of the folks who have a WebOS phone like it a lot.

Now if you want to see a company crash and burn, just let the Google CEO keep spouting off about his thoughts on privacy...

Bye Bye Palm
By mcnabney on 12/18/2009 12:36:28 PM , Rating: 2
I guess choosing an exclusive provider, especially the only provider that has been shrinking for years now, was a dumb move after all. You needed volume sales to survive because that exclusive-contract fee with Sprint wasn't that big. Maybe you should have sold your devices on all of the carriers instead? Oh, well. You were fun while you lasted.

And this is surprizing how?
By HighWing on 12/18/2009 3:18:16 PM , Rating: 2
Fact: The smart phone market is saturated with users stuck in iPhone contracts. And even though some are unhappy, they won't change due to fines associated with breaking contracts.

Fact: The smart phone market already has decent competition from iPhone, Blackberry, Windows Mobile, Google Android, and even older Palm OS's

Fact: Many people do not like change! Especially in the business world which is still a good percentage of the smart phone market.

Considering all that, is it really a surprise that a new smart phone that offers nothing new over competitors, and not even priced cheaper, is not doing so well?

At the least they have to offer something that no one else has, and/or be a LOT cheaper. Otherwise you've got nothing to get people to consider the change beyond those who like change.

palm pre need to re-think
By moises1204 on 12/18/2009 5:15:59 PM , Rating: 2
well i think that choosing sprint as the exclusive provider is not the problem, android pick t-mobile at first and i believe that they are getting bigger by the day, the problem with palm pre is that is missing lots of feature that other smartphone comes with like been able to record have visual voicemail, screen keyboard bigger screen that is what people want now, it has nothing to do with the carrier is the phone, i think they should rethink and make an other pre with 3.5 or 3.7 screen and i garanty you that is going to sell like never before, forget about making smaller pixi make it bigger.

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