Palm Inc's smartphone may not attract lines around the block like past Apple Inc iPhone launches. But its launch will be seen as a badly needed shot of adrenaline for Palm and exclusive provider Sprint Nextel Corp.
Plenty could go wrong. Executives have warned of shortages. Scathing reviews could smother not just Palm's hopes, but also Sprint's. And investors might have to wait a long time for the device to boost Palm's financials.
But the hope is Pre -- with touchscreen control, a slide- out keyboard and an operating system designed for trendy Web services such as social networks -- wows consumers enough to stem Palm's loss of market share and customer defections at Sprint.
The Palm Pre has a touch screen like the iPhone, but also has a slide-out keyboard and runs on Palm's new webOS software, which can run several applications at once, unlike an iPhone.
The original Palm Pilot was all about organizing the user's personal information, and the Pre will take that idea further by synchronizing contacts from Facebook, Gmail and Outlook into a single list — something else the iPhone can't do. The Pre will connect with Apple's iTunes software and download music and photos as an iPhone or iPod can, which may be a first for a device not made by Apple.
Since the Pre made its debut at the Consumer Electronics show in January, excitement over the device has intensified. Even arch rivals Verizon Wireless and AT&T Inc both say they want to sell it after Sprint's exclusivity runs out at the year's end.
If it takes off, Palm may even be an acquisition target.
"If you're buying (Palm shares) now, definitely what you're looking at is that they're going to have the most valuable asset in the industry. At some point, somebody will want to pay a premium for that," Pacific Crest's James Faucette said. "From a products perspective, the impact on the market is probably as important as iPhone."
Sprint and Palm are David to Apple and AT&T's Goliath,
with some casting Pre as the first credible iPhone rival.
Some analysts had fretted about the timing of Pre's June 6 launch, days before Apple is expected to unveil a new iPhone. But several now see Apple announcing an iPhone that is not radically different from previous models.
About 623,000 Pres are expected to move in Palm's fiscal first quarter ending August, five analysts polled by Reuters said. Estimates ranged from 500,000 to 865,000 phones.
That would be a fraction of Apple's launch-quarter sales of 6.89 million for the iPhone that started selling around the world last July. But it's still an ambitious estimate for one phone at Palm, which had third-quarter phone sales of 482,000.
"My sense is that there will good pent-up demand," said Avian Securities analyst Matthew Thornton. "(Palm) is a company that's really gearing up for a complete product refresh."
source : reuters.com
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