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  1.    #1  
    Palm's Huge Inventory Problem: More Than ONE MILLION Handsets Sitting Around Waiting For Buyers

    Does anyone know how excess inventory affects the release of new devices?

    I see a lot of people saying that Palm's savior will be a new device in June. But according to Morgan Stanley:

    "Palm's total channel inventory is an "alarming" 1.15 million units. That is approximately half a year's worth of retail sales, at last quarter's rate."
    With limited funding and competition getting stronger then what is Palm to do with so many unsold phones that people pass over even when they're heavily discounted?

    Apple has an established refurb store that liquidating refurb and often new "last gen" products for a huge discount so they sell out daily. But what do other companies do? Like, if Motorola had 1M Droids left in inventory then do they hold back on Droid 2 or do they just eat the loss of their last gen model?

    I think that Palm learned it's lesson on build quality so a new device is essential to them staying in the game and burying that "cheap hardware" reputation. But 1.15M sounds like a big number to just tuck between the couch cushions.
  2. #2  
    developer units for everyone !!!
  3. #3  
    Good gosh, I had no idea it was so high. Palm's in more trouble than I thought. Going by this information: http://www.precentral.net/palm-launc...rchase-program let's say that each phone costs at retail $459. That's potentially $527 million of goods that are sitting in a warehouse doing nothing for Palm. Of course, it didn't cost $527 million to make the devices, it probably cost less than $150 per phone. But still, if each phone cost $150 then that's still $172 million just gathering dust in a warehouse. That's huge money.
  4. slinky's Avatar
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    #4  
    That's the big question. Nobody knows.

    What all these people looking to "cash in" on don't get is that if Palm produces no phones so that it can sell out existing excess inventory, it burns tons of cash with no revenues to show for it. At the current abysmal burn rate, it means they won't last until 2011 and will need to sell lots of marketable securities now just to float. They are in big trouble and running out of time quickly.
  5. #5  
    It's not good, anyway you look @ it.

    I don't know if Palm is in a position monetarily to release a new piece of hardware. If they do, make no mistake, it's the hail mary pass.

    They are sitting on about 6 months of life right now, due to their cash flow issues. Once the kitty is depleted, I have serious doubts about their viability.

    Personally, I think it's time to start courting potential buyers of the company.
  6. #6  
    If a grocer says he won't order any more banana's until we sell the old ones first. There is a problem
  7. #7  
    I'm guessing Palm won't be releasing anything new on Sprint or Verizon any time soon (they're both sitting on too many Palm phones). But who knows, maybe ATT would order something new from Palm. They really don't have any other phone then the Iphone that's remotely compelling.
  8. #8  
    Let's keep in mind that the million-unit number is from an analyst, and so it could be high. Even so, these are some big numbers, and I really don't know how they'll work through it. They could take them back, put on a fire sale (although it won't be through the carriers; they're already selling them at huge discounts), or whatever.

    What I don't know is how the carrier channel works for Palm. Do carriers order units but not pay for them until they sell through? I'm assuming that's the case, because otherwise the problem would be the carriers' and not Palm's.
    Treo 600 > Treo 650 > HTC Mogul (*****!) > HTC Touch Pro (***** squared!) > PRE! > Epic
  9. #9  
    well, it would still be palms. Why buy more Palm devices if you got left on the hook for so many? I think that number is way too high, analyst's have been more off that this...
    "When there is no more room in hell, the dead will walk the earth"


    PM me your questions, If I cant find an answer, I'll show you who can.
  10. #10  
    The first thing (and more than obvious) is to stop manufacturing unsold models.

    Then, launch a new killer device on another different carrier, but with a strong marketing support from both Palm and the carrier (a new Verizon disaster will sink Palm).

    That's all. If the new device goes wll, the other devices will get their raise too, because they aren't so outdated, and a lot of people will buy it because the new one isn't on their networks.
  11. dwdesign's Avatar
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    #11  
    This makes me upset I got a refurb instead of one of those shiny new ones.
  12. #12  
    Quote Originally Posted by mrloserpunk View Post
    well, it would still be palms. Why buy more Palm devices if you got left on the hook for so many? I think that number is way too high, analyst's have been more off that this...
    Yes, correct, I didn't say that the right way. What I meant was, actually clearing the inventory would be the carrier's problem. But certainly, Palm wouldn't sell any more until the inventory is cleared out.

    But, they could still make a new device, and maybe even sell it. Indeed, that would be the perfect time to make a transition to a new device, when there's no point in making more of the old one. The problem there is, how much will it cost them to terminate their manufacturing contracts early? I think it's already cost them $45 million.

    Yuck.
    Treo 600 > Treo 650 > HTC Mogul (*****!) > HTC Touch Pro (***** squared!) > PRE! > Epic
  13. #13  
    Quote Originally Posted by deCorvett View Post
    The first thing (and more than obvious) is to stop manufacturing unsold models.

    Then, launch a new killer device on another different carrier, but with a strong marketing support from both Palm and the carrier (a new Verizon disaster will sink Palm).

    That's all. If the new device goes wll, the other devices will get their raise too, because they aren't so outdated, and a lot of people will buy it because the new one isn't on their networks.
    This makes some sense, should have read it first before posting my last remarks.
    Treo 600 > Treo 650 > HTC Mogul (*****!) > HTC Touch Pro (***** squared!) > PRE! > Epic
  14. mc25mc's Avatar
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    #14  
    I say put out a new awesome device. All us pre & pixi owners who love webos will get the new device. Give away all the unsold inventory of pre's & pixi's to get people hooked on webos. That will get more phones out there, more apps sold thus developed & more people using webos. I'm convinved that 8 out of 10 peoe trying webos will love it!

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