Ah, analyst estimations, how we missed your vague guesses so. At long last, the analysts have started rearing their heads about Palm (again), this time with Ashok Kumar of Collins Stewart and Ilya Grozovsky of Morgan Joseph issuing calls that amount to the coming death of Palm.
As quoted in Barrons, Kumar states that “momentum appears to have already peaked” and that Palm has cut production levels on the Pre for the rest of the year by 500,000 units. How he knows this, he does not say. Of course, this would be a very puzzling move, as Palm has planned launches in Canada, Australia, and Europe by the end of the year, and will be moving the Pre onto other US carriers early next year. It is worth noting that Kumar has been consistently negative on the Palm and the Pre, and doesn't even formally cover the stock as part of his roll at Collins Stewart.
And then there Ilya Grozovsky’s rating of PALM shares as a ‘sell,’ with the low low low target price of $7.50 (from a Thursday close at $13.55). Grozovsky’s unspecified checks indicate Pre sales in July were down to 100,000, half his estimate of 200,000 for June, and that sales thus far in August will end up even lower than last month. In total, Gozovsky is now expecting that Palm will move 350,000 Pre phones in this quarter, a cut of 50,000 from his previous estimates. He believes that the low numbers that Palm and Sprint have sold thus far may result in price cuts before this year’s holiday season, with concessions being made by Palm on the per-unit price to make up for Sprint’s hefty subsidization.
Of course, all of this analyst guesstimation could very easily be solved if Sprint and Palm were to just come out and tell us how many Pre phones have been sold. At this point, we won’t be too disappointed if it’s not a zillion units, just so long as we have a number.
Comments
I don't even know why these "analysts" get any press at all. It's amazing to think that stock is driven based on what these morons opine.
I think the mistake that many people have made is by comparing the Palm Pre's launch to the likes of Apple's iPhone. ... But they're two different animals altogether. The original iPhone was released en masse, with a huge ad campaign before it. The Pre, on the other hand, was made by an almost-extinct company, its release a much smaller and less trumpeted affair.
I feel the success of the Pre is more a result of LONG-TERM increases in sales and brand recognition. ... The REAL question is if Palm can afford to hold out until that happens. My biased opinion? I'm confident they will.
I understand who do these guys think they are? They are iphone or RIM lovers. They have it out for the Pre from the first day. I swear I would tell them to go to you know where, I cant really express myself without using foul lang, but you guys understand.
Dear Palm-
Time to supply the troops with some new ammo. People want to love the Pre. We Pre owners want to believe we weren't suckered into buying the last new device made by Palm (like the haters claim). We love the good stuff about the Pre (web, phone service, keyboard, Nav, WiFi) and want to believe you care about the things we still need, and that you'll be fixing the things we're complaining about. We're going on 3 months and we need something more from you to help us fight off the growing negative press. Any info in these areas would help...
How many Pres have been sold?
When will the apps start flowing?
What priorities are you working on? --
Do you care that the calendar stinks, the task program is weak and buggy and the memo program is a joke, or does that stuff not show up on your radar? Do you hear people clamoring for video? Do you care about the legacy Palm owners being able to use their data on the Pre?
What target market are you chasing? Who the heck do YOU think the Pre is designed for?
It seems like you want iPhone fans. Is that wrong? Have you defined some niche that's not being served well by Apple or RIM that you're chasing?
Give us something. Please. The silent treatment only works for so long.
Nice. You have given life to the thoughts in my mind. You also must have more patience than I do in waiting for these to be answered :)
Well, who knows they are not waiting for the price drop to $7 and start collecting all the stocks?
Palm price may not be as good as AAPL, but they certainly have room to grow...
Remember: You can't spell "analysts" without the ANAL!!!
Don't get so upset and start making asinine comments. Sell-side research analysts get paid on the accuracy of their assumptions & research and their career depends a lot upon reputation.
If these folks are making such bold statements, there has to be a very good reason behind it. This has nothing to do with love for RIM or Apple. It's about millions of dollars of investment in Palm's stock and incorrect projections can lose their clients a lot of money. So if they're saying its time to sell, they have to have a pretty solid reason why.
@^ you are wrong about the analysts; they are 90% of the time wrong when it comes to such projections and believe me Hedge Funds and Mutual Funds do their own research...
We'll know the truth in September when Palm releases its 1Q earnings report.
Palm can kowtow to the stock market all they wish (and as they should), but the other part of the equation is that they need to have things to sell that people want. They took a huge gamble in killing off the Treo line and leaving solid customers to put up with Centros or move over to the dark side of M$'s OS if they don't want Pres. Since the Pre uses a third, unproven OS with little software except the included invasive "cloud" stuff and some "classic" compatibility - it's a huge gamble.
I was looney enough to buy every Treo update since the 600, and nearly a new PalmOS PDA every year before that going back to 1997. But this WebOS offers me little that I need, and takes away many things I rely upon. Sprint gets no new contract lock, and Palm loses 5 sales just with me. Multiply that by the Frankengarnet-faithful and that's a lot of losses.
As usual, I wish Palm well in getting their act together. But once again, true to form, they have ignored the needs of a large segment of people that actually buy and use their devices. You gotta expect that eventually the analysts would notice that not everyone is drinking the Kool Aid on the Pre and WebOS as it presently exists.
A solid "Classic" emulator with full Desktop sync should have been "Job One" for Palm before they even announced the WebOS. Devices without Applications are easily replaced by the next shiny thing.
Palm did it to themselves. They released a weak SDK, and didn't pay attention to the entertainment aspects of current mobile devices.
Everyone here in the Palm world (Treo Users) have no idea what it is like to have a device that does almost everything correctly. So, stop making excuses for them and put the pressure on Palm where it belongs. This will not only help them with feedback, but the developers out there will benefit from this.
Palm, Really.. $30.00 for a sync program? WTF!
Why are you sticking it to your users? This should be a free app and it just shows how out of touch you are with your consumers and the mobile app market in general. I found it absurd that your app marketing rep stated that they don't want to participate in the race to .99 cent apps? Why not? Who cares how many apps are in you store? The general public doesn't care about anything besides quantity and price. Get over yourselves!
The whole "I don't want 3D games on my Pre" is a load of BS and one fat excuse form Palm supporters.
OK, so if you didn't buy the Pre for that feature, fine. But, 95% of Pre owners out there that have experienced the Iphone can tell you they are stunned that this in not an option. In addition, it has taken a public uproar for Palm to address this and get with the program.
Don't give me that crap about using a DS Lite or PSP. The iPhone and potentially the Pre can rival these devices not only in 3D, but also beat the pants off them in the portability section.
So, I left my iPhone because AT&T was raping me on a monthly basis. (Horribly) I like Sprint and was excited about the Pre and WebOS. I find the OS enjoyable and have only a few issues with it. But, without entertainment, its just a plain old phone.
However, Palm has a limited amount of time to fix these issues. If the Apple exclusive runs out with AT&T in late 2010 early 2011, and Palm still is dragging their feet, it will be curtains for sure.
i think you make a some good points specifically saying people need to pressure palm. Sadly when i've brought up that in places i've found many pre owners just don't want to hear criticism of anything related to Palm or the Pre. Not like in bug identification but saying hey palm needs to fix this it's the kinda of thing that loses customers or deters people. like those horrible ads they put out.
I am SO glad I took Motley Fool's advice and did not invest all my money back when Palm was selling for $4.00 a share! I won't even check to see how much it is selling for now. It would make me nervous to find out how much money I would have lost had I not taken their advice.
Well, if you had reinvested at 4 and you sold today you would have more than tripled your money seeing as PALM is currently near 14. I can see why you're so glad...
You would have still make a killing. But everyday they continue to act like boneheads, but less your return would/will become.
I can't think of much good Palm news in the past month so when that happens you're going to get negative speculation. If they were releasing positive news every week there wouldn't be spectulation. And developers conferences and homebrew apps are fine for the techies but not the mainstreamers. And they don't qualify as the sort of news that will move investors.
C'mon, if the analyst was predicting sales would be through the roof, you would be touting his prediction instead of denigrating him. He may turn out wrong (I hope), but the fact that Palm is planning to roll out the Pre to other carriers soon does not contradict his call of cutting production. In fact, it makes sense if they had planned much higher production for all these roll outs but aren't seeing the demand they predicted and are thus revising planned production lower as a result. Let's not forget also that for awhile after launch the only buzz about the Pre was shortage issues and unusually high return rates. Then the buzz shifted to how terrible the ads were. Palm has seriously been hurt IMO by shortages at the Pre's release, limited marketing budget, and only one ad campaign that most people hate. It's not surprising that sales would be soft as a result.
I swear, these analysts must get college degrees in how to be amazingly stupid.
In the world of technology, there are two kinds of target audiences: Early adopters, and mainstream buyers. There are two phases to a post-launch: early adopters, where you see a big run on devices, followed by a substantial lull during which marketing and word of mouth begins to take its effect and force mainstream buyers into making decisions. Then, after a wind up followed by a couple holiday seasons, when people give more expensive phones as gifts, it picks back up. Especially if you can generate enough expectation that your phone will be available on some customer's existing service, so that they don't have to switch services and deal with that hassle to get the phone they want.
There are still a lot of people who won't buy a Pre because they're locked into 2 year contracts. That's the simple fact. When that contract expires, they switch or, if the phone comes to their provider, they upgrade their phone. It takes time. I didn't see a whole lot of iPhones in the wild at the start, either. It took a year or two.
A RBC analyst just raised his target to $25. If everyone thought a stock was going to go up or down it would do so immediately.
The reason this commenter is holding on to his Treo 700p has nothing to do with the Pre and everything to do with Sprint. As soon as they let me buy a Pre and keep my current plan, which I've had since 2002, then I'll buy one. I have no interest in moving to an "Everything" plan and basically paying twice as much for exactly what I have now -- 2000 minutes per month between three phones, unlimited data on two phones and 500 texts on one, with 300 on the other two, for a combined grand total of $100 per month. A fantastic phone is just not enough incentive to incur the much higher, recurring, fees under an Everything plan.
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