Seeking Alpha
Profile| Send Message|
( followers)  

By John Biggs

Collins Stewart analyst Ashok Kumar (not this guy) is claiming that the Palm Pre will be a dud and that shortages, manufacturing problems, and Sprint’s relative suckitude as a carrier will push the $199 smartphone straight to the bottom.

While I welcome this bracing opinion of everyone’s darling, it seems Kumar has some sort of bone to pick and is bringing up concerns you could have for any phone, including the iPhone. He writes:

Collins Stewart analyst Ashok Kumar claims that his supply chain checks indicate that Palm has “drastically reduced its production orders” for the Pre. Kumar says “multiple hardware and software issues” have forced Palm’s hand here and that he doesn’t expect the company to meet its expected goal of one million units shipped in the second half of 2009. He even goes so far as to describe that figure as “highly unrealistic.”

“Multiple issues” affecting a production run of 1 million? Unless those issues were Yeti invading Palm’s OEM factories in Taipei, I’m fairly certain a company like Palm can dump out a million phones. He also points out that Sprint (NYSE:S) is losing customers and that AT&T (NYSE:T) and Verizon (NYSE:VZ) customers probably won’t switch to Sprint. OK. This I can stand behind. Verizon owns the world on “coverage,” or at least the public’s perception of coverage, and AT&T owns the iPhone, so it will be a tough sell. We can probably expect a migration - unless the Mini-Pre pops up - to happen about a year after the Pre is launched and consumers come to understand the value of the new OS.

Not to go all fanboy, but the Palm Pre is a compelling phone. Unless they completely fail in manufacturing, they can’t do much to break the momentum they’ve thus far gained.

Original post

Source: Will the Palm Pre Make It Out of the Starting Gate?