Joseph Ramelli

Palm's Pre Launch Has Made RBC Bullish

Apps are becoming increasingly more important to success of Smartphones and thus I like to compare the launch of a new Smartphone to the launch of a gaming console. Sega Dreamcast was a great gaming console that was really ahead of its time, but developers were hesitant to jump on-board because they questioned the ability of Sega to sell enough systems to make their investment in developing games pay off. Consumers were hesitant to buy the Dreamcast because they didn't see enough "must own" games. The situation became a circular conundrum with both the developers and the console purchasers waiting for the other to step up. I see Palm Pre being in the same situation, with not many third party developed apps available come launch day.

The other thing that makes me seriously doubt Palm Pre being successful is what consumer really wants more choices in Smartphones? It is not like iPhone and Blackberry users are unsatisfied, in fact quite the opposite as both products users are fanatical with customer satisfaction rates that are off the chart. Oh and one other thing, Apple is coming out with a new iPhone soon and a major upgrade to the OS of existing iPhones that my tech savvy friend said addresses "90% of users requests."

I see the Palm Pre as going down as one of the worst highly anticipated consumer electronic flops in history and that is why we recently shorted the stock. I think that the launch will be so horrible in fact that Palm will have trouble keeping up the appearance of "shortages" for much more than a week. I am certain that the Palm Pre is a great product, but many great products throughout the years have ended up in the boneyard.