Limited sales expected on AT&T

The next iPhone will continue to exacerbate Palm's troubles, according to UBS analyst Maynard Um. Despite the buzz surrounding the Pre announcement early last year, Palm recently cut its guidance for the current quarter. The company cites "slower than expected" sales of the Pri, Pixi, and newer Plus variants.

"To some extent, the launch of the [upcoming] iPhone in the US should help the other handset vendors to the extent operators step up competition to combat AT&T," Um wrote in a note circulated to investors. "However, unlike last year, the competitive landscape has changed (RIM, in our opinion, was the only other real alternative last year) w/ Android-based & WebOS phones now available."

Um believes that Palm must "drive greater scale" to achieve profitability, through both Verizon and AT&T. Unit growth through Verizon is viewed as more likely than AT&T, however, as the iPhone is expected to dominate the latter carrier's marketing activities into the August quarter.

The analyst forecasts Motorola sales to remain stable, driven by solid numbers for Android-based handsets. Expectations for RIM are less clear, with performance believed to be dependent on new BlackBerries and features such as an updated browser.

Um expects Apple to launch a new iPhone sometime in June, following with the company's launch trends for the previous generations.

By Electronista Staff