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  1. gbp
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    #21  
    Quote Originally Posted by s219 View Post
    I don't want to get sidetracked by this. But as I mentioned, Palm and Sprint independently know the inventory and sales numbers. It can be considered joint information. They do not have to "share" the information with each other, thus an NDA is not relevant to this situation.
    Agree,
    Sprint is not going to tell us the numbers for the next three months.

    But assuming that the Pre sales were > 550K and < 700K.
    What do you think about the product in terms of launching ? Is it a successful launch or 500K plus is not a big deal for you ?
  2. #22  
    Quote Originally Posted by SharonW View Post
    Well, I believe that people are NOT considering all the facts at hand, just the ONE missing, i.e. exact Pre sales. The first facts we have are what Palm sold in the prior two quarters. In Q3 2009, they sold 480,000 Palm OS phones, in Q4 2009 they sold 353,000 Palm OS and and some in-channel Pres estimated between 70,000-130,000, so call it in between at 100,000 leaving only 253,000 OS phones. That's a quarter over quarter drop of almost 50% for old OS phones!!! Now since they did say they are still seeing big declines in the sales of their old OS phones, one can assume that they sold even LESS than 253,000 OS phones in Q1 2010.

    The only extrapolation needed at this point is what is the current rate of decline in the old OS line. It isn't hard to get to GS's estimate of 670,000 if old OS declines were still maintaining a roughly 50% decline. Moreover, if you add back in the 100,000 Pres sold in the previous quarter to GS's Q1 figure you'd have total Pre sales of 770,000.
    Man, that's pretty persuasive stuff. To get a range, though, the most conservative possible interpretation is if Palm sold 70k Pre's in June, and you assume something less than 50% decline on previous phones (let's say 25%). This is in the category of very conservative, as I find it hard to believe that very many people were all that interested in a Treo Pro after the Pre came out. So, 353k - 70k = 283k, 283k * 75% = 212k, and 823k - 212k = 611k. For total number out there (through August), 611k + 70k = 681k. Since we're already part way through September, one can assume that there are a few more than that.

    Based on these numbers, we'd be pretty hard pressed to assume that there are any less than 700k Pre's out there right now. Regardless of how this looks in comparison to iPhone numbers, that looks pretty successful to me. The price drop has to accelerate that.

    I find something else interesting. Revenue per phone. Palm's non-GAAP revenue was $386M? On 823k phones? That's $469 per phone. I'm thinking that means they get $500 per Pre. I thought at one time someone speculated that Palm is getting $300 per phone from Sprint (ie wholesale). $500 per phone is pretty amazing. If someone knew what they get for Treo Pros and Centros, we could probably do a little algebra to back up all the analyses. Although there may be other revenue streams that mess up these calculations.
    Palm III-->Handspring Visor-->Sony Clie PEG-NR70-->no PDA -->Palm Treo 755p-->Palm Pre-->HP Veer
  3. gbp
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    #23  
    Quote Originally Posted by jbg7474 View Post
    Based on these numbers, we'd be pretty hard pressed to assume that there are any less than 700k Pre's out there right now. Regardless of how this looks in comparison to iPhone numbers, that looks pretty successful to me. The price drop has to accelerate that.
    Very good analysis there ( with the little info we had).

    The PANDORA and ACCUWEATHER downloads are around 450K range.
    Many of the PALM Pre users ( new to smartphones) are new to APP catalog.
    I would definitely add 100K more to the PANDORA number for finding actual Pre's sold.
  4. #24  
    A launch of ~500k-650k is a decent launch for an average phone, but it is not a good launch for a bet-your-company product like the Pre. Heck, a lot of the people here were saying they expected Palm to sell ~300k-400k units the first weekend and then they were saying ~650k units the first week. Well now it's 3+ months later and we're still hoping for 650k. Not so good.

    If you'll recall McNamee's hyperbolic rhetoric, all those iPhone users that were coming out of their contract in the summer were going to buy the Pre. He actually said that. He may not have believed it but I'm sure Palm was hoping for some significant dent in the iPhone's sales going to Palm. Instead, Apple sold ~1 million iPhones 3GS units the first weekend and millions since.

    No, the Pre is not as strong as they had hoped. If it were, they wouldn't need to raise even more capital now to stay in business. You have to remember every time they offer more stock that adds more investors they need to pay back and dilutes the value of what's already out there.

    I'm not trying to be negative, just a realist.
  5. #25  
    Quote Originally Posted by gbp View Post
    Very good analysis there ( with the little info we had).

    The PANDORA and ACCUWEATHER downloads are around 450K range.
    Many of the PALM Pre users ( new to smartphones) are new to APP catalog.
    I would definitely add 100K more to the PANDORA number for finding actual Pre's sold.
    I actually think app download counters are a bad way to judge the number of phones out there (although it's a good way for developers to figure out how large their market might be). For one thing, we're not sure whether the counter increases if you delete an app and then reinstall it, or if it increases when someone gets a replacement Pre and reinstalls it. For another, we have absolutely no way to know how many users download apps at all. And in fact, I think we can pretty safely speculate that more users at launch were into apps than users buying now. That's because early adopters are more likely to be gadget freaks who are into doing anything you can, whereas people who are just casually walking into Sprint or BB looking for another phone may not. Then again, the app catalog is very user friendly, so anyone who stumbles on it is likely to try it.

    Well, nothing is certain here, but I think there is a range that is starting to become clear, and the floor is above 500k. Without a doubt, by Jan 2010 there will be well over 1M webOS devices out there, and the rate will be accelerating. We'll see the intro of the Pixi, and perhaps another price drop on the Pre ($129?). Pre will then soon be on Verizon, and we'll really see it take off then (especially if Verizon works at it a little bit). You have to see a fairly bright future for Palm in this, as long as they keep at it, as they seem inclined to do. They don't need to sell iPhone numbers to do well. They are clearly going to sell enough webOS devices to keep things moving.
    Palm III-->Handspring Visor-->Sony Clie PEG-NR70-->no PDA -->Palm Treo 755p-->Palm Pre-->HP Veer
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    #26  
    Quote Originally Posted by clipcarl View Post
    I'm not trying to be negative, just a realist.
    I think those are valid points that you sort of arrive at from the raw facts, which is sort of where I am coming from. If Palm could fill in more details we might legitimately pump up the results, but the way things are now, you have to take an optimistic view to make it look optimistic.

    I had long dismissed the Pre's iPhone-killer aspirations just because the SDK is so limited. So, I don't hold the sales figures up against the iPhone juggernaut at this point in time. I think Palm can be successful with these smaller numbers. The need to find their niche and mature the platform. Trying to be the next iPhone killer (note: all the previous ones have risen and then gone down in flames) is not the way to do that. In fact, it could actually be a detriment. Palm needs to do their own thing.
  7. #27  
    Quote Originally Posted by clipcarl View Post
    If you'll recall McNamee's hyperbolic rhetoric, all those iPhone users that were coming out of their contract in the summer were going to buy the Pre. He actually said that. He may not have believed it but I'm sure Palm was hoping for some significant dent in the iPhone's sales going to Palm. Instead, Apple sold ~1 million iPhones 3GS units the first weekend and millions since.
    I agree with the thrust of what you've said--I think the sales numbers have not been as good as what some hoped for. I don't know that Palm (and remember that McNamee is not Palm, just a gigantic Palm investor) has missed their own internal numbers, but certainly they haven't killed the iPhone.

    However, I would like to quibble a bit with you about what McNamee said. He said that all those initial iPhone adopters would not be getting new iPhones. He didn't say they would get Pre's. You can make an argument that he implied they would be getting Pre's, but he didn't say that they would, merely that they wouldn't be getting iPhones. I think he was probably wrong about that anyway.

    Anyway, as many have noted, the iPhone is just not an apt comparison right now for many reasons. Perhaps the Storm launch is a better one to look at. Scale the Storm launch numbers by the Sprint:Verizon ratio, and then see how the Pre looks. I think it's still a bit on the disappointing side. That's not to say it's not successful in the business sense of the word. As a user, I care about Palm being successful as a business so that they stay in business and continue to provide me good products. And I'm satisfied that that's the course they're on.
    Palm III-->Handspring Visor-->Sony Clie PEG-NR70-->no PDA -->Palm Treo 755p-->Palm Pre-->HP Veer
  8. gbp
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    #28  
    Quote Originally Posted by clipcarl View Post
    A launch of ~500k-650k is a decent launch for an average phone, but it is not a good launch for a bet-your-company product like the Pre. Heck, a lot of the people here were saying they expected Palm to sell ~300k-400k units the first weekend and then they were saying ~650k units the first week. Well now it's 3+ months later and we're still hoping for 650k. Not so good.

    If you'll recall McNamee's hyperbolic rhetoric, all those iPhone users that were coming out of their contract in the summer were going to buy the Pre. He actually said that. He may not have believed it but I'm sure Palm was hoping for some significant dent in the iPhone's sales going to Palm. Instead, Apple sold ~1 million iPhones 3GS units the first weekend and millions since.

    No, the Pre is not as strong as they had hoped. If it were, they wouldn't need to raise even more capital now to stay in business. You have to remember every time they offer more stock that adds more investors they need to pay back and dilutes the value of what's already out there.

    I'm not trying to be negative, just a realist.
    Valid points.
    Here is my counter argument, while the new stock offer dilutes the value , why would anyone buy the stock if they think 500K sales is a low figure.
    They might have thought , the sales numbers are decent plus PALM is releasing the Pixie. And Verizon will start selling the Pre in four months.

    Reality is PALM is no APPLE or RIMM in the sales of smartphones , not even closer, but it will survive.
    It could have been a different story if SPRINT / PALM worked more on the pricing and marketing of the Pre.

    SPRINT messed up two things. First the price of the Pre, then lack of marketing prior to release.
    Baring McNamee no one at SPRINT or PALM talked about competing with the iPhone.
    The only thing they did was a photo of the Pre resting on an apple.

    So , I would not bring iPhone to the mix.
    Comparing iPhone is comparing Michael Jordan (in Hesse speak.

    Bottom line, the sales are fine , not iPhonesque. And PALM will make more money in coming years.
  9. gbp
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    #29  
    Speaking of which , I was reading about RAZR on wiki ( FWIW).
    Motorola sold 50 million of these between 2004 and 2006.

    I am not sure how many were sold in the first three months ?
  10. #30  
    Palm seems to be buying a lot of components from an IC producer, WPG. I stumbled across this article. Not much info, but the numbers kind of shocked me. Palm is buying 2M of something per month?

    WPG expands shipments of smartphone components

    Here's the relevant paragraph:
    The IC distributor ships around 500,000 sets of components for BlackBerry devices, two million sets for Palm Pre and two million for iPhone 3GS each month, market sources estimate. Its monthly shipments for BlackBerry are expected to reach one million units by the end of 2009, the sources noted.
    Palm III-->Handspring Visor-->Sony Clie PEG-NR70-->no PDA -->Palm Treo 755p-->Palm Pre-->HP Veer
  11. #31  
    Quote Originally Posted by s219 View Post
    ...
    An NDA is generally intended to protect intellectual property, proprietary information, or stuff that hasn't been patented but needs to be exchanged between partners, so I don't think that enters into sales info specifically. They may have other contracts in place that govern this. But I keep coming back to the idea that if they had something good to announce, they would have. That's practically a tenet of publicly traded companies pushing new products.
    ...
    You're basing your conclusion on your incorrect premise. That may be your experience with NDAs, but I've been working as a contractor in the IT field for about 15 years now, and most of the NDAs I've had to sign had nothing to do with intellectual property, stuff that hasn't been ateneded, etc. They did have to do with "proprietary information", but your belief that it "doesn't enter into sales" is simply incorrect. Sales are most definitely part of proprietary information.

    I've wondered too why Palm hasn't released actual sales numbers (and no, "they're bad" is not a good enough reason), and I suspect SharonW's pretty much on target with this one.
  12. gbp
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    #32  
    Quote Originally Posted by hparsons View Post

    I've wondered too why Palm hasn't released actual sales numbers (and no, "they're bad" is not a good enough reason), and I suspect SharonW's pretty much on target with this one.
    I bet it is something to do with SPRINT than PALM.
    SPRINT didn't release the Instinct sales numbers yet.
    Take a look at the news articles during the SAMSUNG Instinct debacle.
    SPRINT always said they are selling well or "Best selling phone on SPRINT".

    But they never gave the numbers away.
    Off late , the analysts are looking for the phone sales numbers for their analysis purposes.

    APPLE started boasting the sales numbers in 2007 by public announcements. I remember many of the analysts crunching numbers on the bottom line to APPLE based on the sales.
  13. gbp
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    #33  
    Quote Originally Posted by jbg7474 View Post
    Palm seems to be buying a lot of components from an IC producer, WPG. I stumbled across this article. Not much info, but the numbers kind of shocked me. Palm is buying 2M of something per month?

    WPG expands shipments of smartphone components

    Here's the relevant paragraph:
    I bet that has to do with GSM Pre / Verizon Pre.
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       #34  
    Quote Originally Posted by s219 View Post
    I don't want to get sidetracked by this. But as I mentioned, Palm and Sprint independently know the inventory and sales numbers. It can be considered joint information. They do not have to "share" the information with each other, thus an NDA is not relevant to this situation.

    NDAs are used when one party has private information that it wants to share with a second party, but require that the second party not disclose it with third parties. Emphasis on "share". The NDA is put in place before the information is shared.

    They may have a contract agreement to not release joint sales numbers. That is not the same as an NDA. NDAs are only used when the information is initially private to just one of the parties.
    Yikes! I feel like I'm banging my head against a brick wall. Let me reiterate for a third time from the definition of an NDA: "a legal contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to by third parties."

    Please note the bolded portion, again. Information they wish to restrict access to by third parties.

    Example: Sprint "We're having very strong sales right now and anticipate that we'll be needing 150,000 more Pres in the next week. Palm "No problem, we've got 250,000 currently in production scheduled to ship in four days." Sprint "We've sold 400,000 Pres in the last month, we see no drop off in demand." Palm "Let's have conference call to discuss a new production road map." Confidential information, all covered, and not available to third parties. Palm knows how many Pres it sold to Sprint. Sprint knows how many Pres it sold to the public. They share information with each other. They don't share with outsiders, third parties.

    An initial NDA before negotiations begin is obvious, but upon completion of a contract it can be incorporated into the contract along with other, new confidentiality clauses.
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       #35  
    Quote Originally Posted by clipcarl View Post
    A launch of ~500k-650k is a decent launch for an average phone, but it is not a good launch for a bet-your-company product like the Pre. Heck, a lot of the people here were saying they expected Palm to sell ~300k-400k units the first weekend and then they were saying ~650k units the first week. Well now it's 3+ months later and we're still hoping for 650k. Not so good.

    If you'll recall McNamee's hyperbolic rhetoric, all those iPhone users that were coming out of their contract in the summer were going to buy the Pre. He actually said that. He may not have believed it but I'm sure Palm was hoping for some significant dent in the iPhone's sales going to Palm. Instead, Apple sold ~1 million iPhones 3GS units the first weekend and millions since.

    No, the Pre is not as strong as they had hoped. If it were, they wouldn't need to raise even more capital now to stay in business. You have to remember every time they offer more stock that adds more investors they need to pay back and dilutes the value of what's already out there.

    I'm not trying to be negative, just a realist.
    Here's a little realism for you:


    Palm Rises Most Since June on Stock Offering Talk

    Sept. 21 (Bloomberg) -- Palm Inc., the maker of the Pre phone, jumped 14 percent in Nasdaq Stock Market trading on speculation that investors are reacting positively to a planned stock offering.

    Palm added $1.94 to $15.95 at 4 p.m. New York time, the most since June 26. The shares have climbed more than fivefold this year.

    Palm said last week it would try to sell 16 million shares and investor Elevation Partners may buy $35 million of stock in the offering. There’s speculation that an 11 percent increase in the company’s outstanding share count will be accepted by its stockholders, said Matt Thornton, an analyst at Avian Securities LLC in Boston.

    “There has been some chatter that the common offering has been well received by existing shareholders,” said Thornton. There is talk that the offering may be “digested pretty well,” he said.

    Chief Executive Officer Jon Rubinstein is counting on the Palm Pre smart phone to pull the company out of a two-year sales slump. Revenue, including sales recognized over the life of phones, will be $240 million to $270 million this quarter, Palm said. Analysts had projected revenue of $305.9 million on average, according to a Bloomberg survey.

    Palm is boosting spending on marketing this quarter as it takes on Apple Inc.’s iPhone and Research In Motion Ltd.’s BlackBerry.

    The stock was also mentioned on CNBC today by Jim Cramer, who said there is still room for Palm in the mobile-phone market, along with Apple and RIM.

    Palm Rises Most Since June on Stock Offering Talk (Update1) - Bloomberg.com
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       #36  
    Quote Originally Posted by jbg7474 View Post
    Palm seems to be buying a lot of components from an IC producer, WPG. I stumbled across this article. Not much info, but the numbers kind of shocked me. Palm is buying 2M of something per month?

    WPG expands shipments of smartphone components

    Here's the relevant paragraph:
    Wow! Thanks for that tidbit. You know that just furthers my belief that Palm said Q2 income will fall shy of previous expectations and also covers why they more cash and thus the stock offering, because they are doing a MASSIVE ramp up in production and subsequently more marketing. Not merely for the Pixi alone, but for both devices for multiple carriers in multiple countries (O2 representing several European countries). They'll be producing for Sprint, Bell in Canada, O2 in Europe for holiday sales, as well as for Verizon and maybe AT&T come January/February. I also believe there is a third device to come and yet to be announced. We still have no answer on what that C40 is in the price data base.
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    #37  
    Quote Originally Posted by gbp View Post
    Valid points.
    Here is my counter argument, while the new stock offer dilutes the value , why would anyone buy the stock if they think 500K sales is a low figure.
    They might have thought , the sales numbers are decent plus PALM is releasing the Pixie. And Verizon will start selling the Pre in four months.

    Reality is PALM is no APPLE or RIMM in the sales of smartphones , not even closer, but it will survive.
    It could have been a different story if SPRINT / PALM worked more on the pricing and marketing of the Pre.

    SPRINT messed up two things. First the price of the Pre, then lack of marketing prior to release.
    Baring McNamee no one at SPRINT or PALM talked about competing with the iPhone.
    The only thing they did was a photo of the Pre resting on an apple.

    So , I would not bring iPhone to the mix.
    Comparing iPhone is comparing Michael Jordan (in Hesse speak.

    Bottom line, the sales are fine , not iPhonesque. And PALM will make more money in coming years.
    I'm guessing you missed those Sprint commercials mentioning the iphone.
  18. #38  
    Quote Originally Posted by Adjei View Post
    I'm guessing you missed those Sprint commercials mentioning the iphone.
    A dunkin doughnuts in spaaaaace.

  19. #39  
    Quote Originally Posted by SharonW View Post
    Even if returns rates were that high, Palm's huge increase in non-GAAP revenues from $113 million in Q4 2009 to $360 million in Q1 2010 would belie that conjecture. Moreover, the monthly revenues generated from ownership go to Sprint, not Palm since no app sales are included which would be the only monthly income they receive outside of sales.
    Conveniently, revenues do not include costs/expenses. Naturally, Palm gets to take credit (revenue) on total phones moved through the system. However, Palm expenses for refurbing the returns is probably contributing significantly to their $165 million loss in that same first quarter of Pre sales. Those "phones in limbo" can become an overwhelming financial burden if not controlled.

    Quote Originally Posted by gbp View Post
    Valid points.
    Here is my counter argument, while the new stock offer dilutes the value , why would anyone buy the stock if they think 500K sales is a low figure.
    They might have thought , the sales numbers are decent plus PALM is releasing the Pixie. And Verizon will start selling the Pre in four months.
    10 Months ago Verizon released the BB Storm as an exclusive provider. The release was a nightmare of returns and bad reviews. Still, within three months of the Storm's release, Verizon reported selling over 1,000,000 of the devices. The Palm/Sprint Pre story pales in comparison.
  20. gbp
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    #40  
    Quote Originally Posted by Kupe View Post

    10 Months ago Verizon released the BB Storm as an exclusive provider. The release was a nightmare of returns and bad reviews. Still, within three months of the Storm's release, Verizon reported selling over 1,000,000 of the devices. The Palm/Sprint Pre story pales in comparison.
    Funny how that works!!

    I am not clear on the sales numbers. Is it that VERIZON bought a million STORMS in bulk from RIMM and took their sweet time selling them to customers or
    they sold a million phones to customers in a month ?

    My observation is that , T Mobile and Verizon bought the phones from HTC and RIM. But they took their sweet time selling them to customers.

    Even then I don't see them around that often.
    Plus no one talks about no of returned STORMs. I have seen corporate customers sending back their bulk purchases.

    My stand is that the sales are decent.
    STOCK price will speak for the results.
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