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  1. SharonW's Avatar
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    #41  
    Man, there is so much misinformation on this thread. First, NOBODY expected the Pre to turn Palm profitable this quarter! NOBODY, INCLUDING PALM. Palm has been losing market share with its Treo and Centros for the LAST YEAR. They are down each quarter. Non smart phone sales outside of Palm are down. Smart phone sales are up. This report BEAT market expectations, with the exception of their forward guidance for Q2 which is prior to Xmas sales, but will include other device launches.

    Second, their last quarter which ended in May, before the Pre launch showed 350,000 cell phones sold. The assumption was made that at least 70,000 of those sales were Pres sold into the channel (meaning sold to Sprint, but not yet on sale as the launch didn't occur until June 6th in the Q1 which is the quarter they're commenting on now). Therefore, old Palm products couldn't account for anymore than 280,000 out of that 823,000 figure meaning at the very least, the Pre sold 543,000 for the quarter. Great sales! And since Palm said sales of old Palms were DOWN again for the quarter probably means they sold less than the 280,000 old Palms.

    Thirdly, Palm is not going bankrupt or running out of money. They need more money for development and marketing costs associated with NEW DEVICES coming out on multiple carriers. Their current burn rate would have the cash on hand without a stock offering last for another year without any sales increases. Therefore, with sales increases based on mutliple carriers and multiple devices, current cash plus a stock offering will give them room to proceed on different fronts all at the same time, but put a crimp in near term profit.

    Additionally, they could also be guiding down (as they've never, ever guided before) to lower expectations to increase the likelihood that they actually knock it out of the park next quarter. Apple is notorious for doing that.
  2. #42  
    Quote Originally Posted by SharonW View Post
    Man, there is so much misinformation on this thread. First, NOBODY expected the Pre to turn Palm profitable this quarter! NOBODY, INCLUDING PALM. Palm has been losing market share with its Treo and Centros for the LAST YEAR. They are down each quarter. Non smart phone sales outside of Palm are down. Smart phone sales are up. This report BEAT market expectations, with the exception of their forward guidance for Q2 which is prior to Xmas sales, but will include other device launches.

    Second, their last quarter which ended in May, before the Pre launch showed 350,000 cell phones sold. The assumption was made that at least 70,000 of those sales were Pres sold into the channel (meaning sold to Sprint, but not yet on sale as the launch didn't occur until June 6th in the Q1 which is the quarter they're commenting on now). Therefore, old Palm products couldn't account for anymore than 280,000 out of that 823,000 figure meaning at the very least, the Pre sold 543,000 for the quarter. Great sales! And since Palm said sales of old Palms were DOWN again for the quarter probably means they sold less than the 280,000 old Palms.

    Thirdly, Palm is not going bankrupt or running out of money. They need more money for development and marketing costs associated with NEW DEVICES coming out on multiple carriers. Their current burn rate would have the cash on hand without a stock offering last for another year without any sales increases. Therefore, with sales increases based on mutliple carriers and multiple devices, current cash plus a stock offering will give them room to proceed on different fronts all at the same time, but put a crimp in near term profit.

    Additionally, they could also be guiding down (as they've never, ever guided before) to lower expectations to increase the likelihood that they actually knock it out of the park next quarter. Apple is notorious for doing that.
    Agreed.
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  3. s219's Avatar
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    #43  
    I don't think anyone was expecting a profit, no reason to argue that point. I just wish they weren't dancing around the actual sales figures.
  4. Clack's Avatar
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    #44  
    Quote Originally Posted by ronnienyc View Post
    Handset sales down 30% from last year this time? Ouch. So the Pre has not yet turned things around for Palm. Maybe it'll get better once the other carriers are on board.

    http://www.precentral.net/palm-annou...y-2010-results
    If Palm had put out quality hardware, it probably would have done much better.
    "We must not contradict, but instruct him that contradicts us; for a madman is not cured by another running mad also." - Dr. An Wang
  5. #45  
    There's only one reason I can think of why they wouldn't explicitly state the Pre numbers--they didn't meet expectations, and they don't want the headline to be "Palm's new Pre fails to meet sales expectations."

    Now, that's not to say that Palm is dying and about to go bankrupt as a result. Actually, if there were 500k+ sold this quarter and 70k sold last quarter, that's a pretty good number of machines. There absolutely will be over 1M WebOS devices out there by the end of CY 09. I think this is good news for all of us.

    But let's also call a spade a spade: the Pre has not been a runaway smash hit. I don't know why as it's the best phone Sprint's got right now. Maybe it will do better at $150.
  6. #46  
    I found some of the posts in this thread (the ones that I thanked) interesting. I don't necessarily agree with the "Palm is doomed" posts but I think they raise points of caution that Palm needs to observe.

    My read between the tea leaves is that maybe Palm is selling the Pixie for less profit than the Pre (and hence the reason for "pessimistic" guidance for the next quarter). Maybe Sprint was willing to pay a higher price for the pre provided they got an option to get the Pixie for a significantly lower cost from Palm. I have no reason to say this other than "it's just a hunch on my part".
    I'm both super! ... and a doer!
  7. #47  
    Quote Originally Posted by SharonW View Post
    Man, there is so much misinformation on this thread. First, NOBODY expected the Pre to turn Palm profitable this quarter! NOBODY, INCLUDING PALM. Palm has been losing market share with its Treo and Centros for the LAST YEAR. They are down each quarter. Non smart phone sales outside of Palm are down. Smart phone sales are up. This report BEAT market expectations, with the exception of their forward guidance for Q2 which is prior to Xmas sales, but will include other device launches.
    I don't think anyone wondered whether or not the Pre would staunch the bleeding to some degree. It is indeed nice that they beat MARKET LOSS expectations. Up was the only direction left for them to go. But they did not beat SALES expectations for the Pre which had been in the 700K-1million range from analysts who have been steadily downgrading it.

    Second, their last quarter which ended in May, before the Pre launch showed 350,000 cell phones sold. The assumption was made that at least 70,000 of those sales were Pres sold into the channel (meaning sold to Sprint, but not yet on sale as the launch didn't occur until June 6th in the Q1 which is the quarter they're commenting on now). Therefore, old Palm products couldn't account for anymore than 280,000 out of that 823,000 figure meaning at the very least, the Pre sold 543,000 for the quarter. Great sales! And since Palm said sales of old Palms were DOWN again for the quarter probably means they sold less than the 280,000 old Palms.
    "Great" is an exaggeration, I'm afraid. Again, Palm and Sprint's confidence in the "greatness" of the sales is evident in their concealment of the hard numbers of units sold. By only admitting to a sales range ("the majority" of 800K+ units), it's clearly not the kind of blockbuster figure they can tout to instill investor confidence. And this was when the phone had the market to itself. Now, there's competition on Sprint with the Hero, Instinct HD, and Instinct Q. The iPhone 3GS will continue to steal customers from every carrier, including Sprint. Market pressure will continue to drive the prices of the Pre and Pixi downward.

    Don't get me wrong. The numbers are good. But good enough? It remains to be seen.

    Thirdly, Palm is not going bankrupt or running out of money. They need more money for development and marketing costs associated with NEW DEVICES coming out on multiple carriers. Their current burn rate would have the cash on hand without a stock offering last for another year without any sales increases. Therefore, with sales increases based on mutliple carriers and multiple devices, current cash plus a stock offering will give them room to proceed on different fronts all at the same time, but put a crimp in near term profit.
    Wow, so Palm isn't running out of money, but they have to do yet another stock offering just to cover marketing costs for a comparatively modest marketing campaign, the bulk of which will probably be handled and financed by Sprint or whichever carrier is "exclusively" carrying the device at first? ok.
    Last edited by mikah912; 09/17/2009 at 10:51 PM.
  8. SharonW's Avatar
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    #48  
    Quote Originally Posted by Clack View Post
    If Palm had put out quality hardware, it probably would have done much better.
    It has been stated by Palm, Sprint and multiple analysts that there were not any higher returns for hardware problems than average.

    You want problems, go look at RIM's Tour trackball problems. They're actually documented on YouTube. I read something like a 50% return rate.
  9. SharonW's Avatar
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    #49  
    Quote Originally Posted by mikah912 View Post
    I don't think anyone wondered whether or not the Pre would staunch the bleeding to some degree. It is indeed nice that they beat MARKET LOSS expectations. Up was the only direction left for them to go. But they did not beat SALES expectations for the Pre which had been in the 700K-1million range from analysts who have been steadily downgrading it.



    "Great" is an exaggeration, I'm afraid. Again, Palm and Sprint's confidence in the "greatness" of the sales is evident in their concealment of the hard numbers of units sold. By only admitting to a sales range ("the majority" of 800K+ units), it's clearly not the kind of blockbuster figure they can tout to instill investor confidence. And this was when the phone had the market to itself. Now, there's competition on Sprint with the Hero, Instinct HD, and Instinct Q. The iPhone 3GS will continue to steal customers from every carrier, including Sprint. Market pressure will continue to drive the prices of the Pre and Pixi downward.

    Don't get me wrong. The numbers are good. But good enough? It remains to be seen.



    Wow, so Palm isn't running out of money, but they have to do yet another stock offering just to cover marketing costs for a comparatively modest marketing campaign, the bulk of which will probably be handled and financed by Sprint or whichever carrier is "exclusively" carrying the device at first? ok.
    YOU ARE COMPLETELY WRONG on the sales numbers analysts were expecting for the first quarter. NOBODY was expecting first quarter sales of one million! Many of those analysts who began downgrading expectations were downgrading to 350,000!!! And the math in garnering approximate sales of the Pre isn't difficult, as I already explained if you know anything about their sales history for their older products.

    Lastly, I did not say anything about modest marketing whose costs are carried by Sprint. Sprint didn't carry all marketing costs to begin with, but to my point, try rereading. I talked about multiple marketing costs in three different countries with three different carriers and now two products and I also included development costs for the Q2. That's Sept. through Nov., NOT the quarter just reported.
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