updated 03:05 pm EST, Mon January 12, 2009
Citi on Palm Pre Estimates
Palm could push as many as 1.5 million units of its Pre smartphone in a year, according to an investment note by Citi analyst Jim Suva. The researcher has upgraded the company's stock rating from "sell" to "hold" based on the technical abilities of the device, which has a more modern operating system than existing Palm phones and is also the company's first large touchscreen phone. The phone is seen as a direct factor in soften Palm's mounting losses and bringing its sales back up.
"The new Pre smartphone clearly stole the show at CES," he says. "We’re impressed on multiple fronts: good form factor with solid fit and finish and multiple thoughtful touches; very impressive innovative user interface with great navigation; and a highly orchestrated launch that was not compromised by product leaks."
Suva is nonetheless cautious regarding how much help the Pre will give Palm and believes that Palm will still suffer losses for the next few years. The company's unwillingness to provide a price at this early stage is also a point of concern as the company may be particularly conservative with how much it charges users.
"While reaction was overwhelmingly positive (and rightfully so in our view), very little was asked or offered on Palm’s pricing strategy for the Pre," he says, though he estimates the phone will sell for between $199 and $249 on a Sprint contract.
Outside of the report, other factors are expected to play into the company's final tally, such as known plans to introduce a GSM Pre that significantly expands the worldwide market for Palm as well as a touchscreen Centro in the fall whose lower price may expand Palm's reach. Palm also faces the possibilities of upgrades to the iPhone and other competitors that reduce the appeal of the Pre by the time it ships in the first half of this year.