updated 05:20 pm EDT, Mon August 17, 2009
Morgan Joseph on Palm Eos
Palm could not only be facing cooling sales of its most important phone but a delay in a much-needed budget smartphone, Morgan Joseph analyst Ilya Grozovsky said in a note today. He estimates through checks that sales of the Pre halved from 200,000 during its June launch month to 100,000 in July and that they should fall again this month. If this occurs, it's expected that Palm would prop up the smartphone through a price cut.
The research partly supports a Barclays Capital report from Amir Rozwadowski that predicts a gradual decline but contradicts Pacific Crest expert James Faucette, who through his own investigations believes that sales have moved up slightly from July thanks to better advertising, a good reputation and better stock.
Regardless of sources, Grozovsky maintains that Palm's future for the rest of the year is also in doubt and believes that the Eos, Palm's Centro replacement, is unlikely to be ready for the lucrative fall quarter. Why this would be isn't said, but he mentions that Palm faces tough prospects for the Eos as it's expected to go on sale at AT&T, where it would have to compete with the $99 iPhone 3G.
The Pre has helped Palm salvage its previously rapidly declining smartphone business but is suspected of only having a short-term edge at present because of its exclusivity to Sprint in the US and international sales that will only start next week, when Bell Canada offers its version. The Eos is rumored to be the first webOS phone for the US outside of Sprint and could cost half the price of the Pre. In 2010, the Pre is expected to reach AT&T and Verizon.