Palm May Short Pre Supply

Palm may deliberately keep supplies of the Pre artificially low to create a perceived shortage and spur demand, analysts estimate. Rather than ship as many as possible, the phone producer is believed by Bloomberg to be shipping about 375,000 devices in the first wave and to count on a relatively quick sellout. By making the phone elusive early on, Palm would both garner headlines and would help encourage better follow-up sales.

The company is expected to base its rollout on Apple's experiences with the iPhone 3G last year. Apple sold 1 million units on the July 2008 launch weekend and had sold out at nearly all of its own retail stores within several days. Shortages were common at stores for the first several weeks and were reflective of Apple's sales of 6.9 million iPhones during that summer.

Palm is heavily dependent on the Pre's launch to remain in business. The Sunnyvale-based company has been quickly burning through its cash as sales of its present-day phones continue to weaken and has taken to reselling shares to give itself enough funding to stay in business through at least the initial launch of the Pre, which is still on track for no later than June.

By Electronista Staff

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iPhone, industry, Palm, mobile phones, Apple