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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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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.




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