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  1. #21  

    Thanks again for your insights. I am already an addict on the ccs. Heard the last call about 5 times. Unfortunately, because the data varies so radically month to month, Hand can't know what is happening next quarter when they do the cc . So one can't place to much faith in their guesses. According the survey on Treo 300, in August 38 owners bought, in September only 10 , in October, 26 buyers and in November 46 buyers. The up and down nature of the trends makes projections quite difficult.

    I agree with you that lower data prices are where it is at. TMobile needs to lower their prices once they get their Treo inventory in place if they want this thing to take off. I also think the lower prices at Amazon helped by forcing the other stores to lower their prices as well. To be true to its name, a Treo should have a price in the $300 area but I don't know whether the economies of scale have driven prices down to where this can be maintained going forward?

    Can you provide any insight as to what is happening with the 270. First it was dropped from Amazon. Second, the dvd incentive was taken away. Since it is doubtful they are having production problems. it would seem like either the unit is being upgraded, or it is being customized for someone like TMobile, or AT&T. Perhaps shipments into a new service providers inventory are detracting from hand's ability to replenish the inventory of people like Amazon. Any thoughts on this?

    By the way my guess as to how Amazon does it is that they beat up both Hand and Sprint a little more then each is willing to confess. Hand treats them like a marginal customer. They ship to them when it suits them and don't ship when it doesn't . In return from that threatment I guess Amazon has extracted a lower price point than what Hand wants to admit to. They probably did the same with Sprint, but Sprint doesn't want to confess to it either. So each expresses surprise about how it is happening.
  2. #22  

    maybe the reason for the 270 disappearing from Amazon and from the DVD deal at Handspring is simply that they are selling faster than they can produce it. Remember that the 270 is selling worldwide, while the 300 only sells in the US. One more month and we will know from the Q2 report...
  3. #23  
    I think you have a very valuable point Geir. I once read a post in which a vendor talked about how well handspring planned out it purchase requirements to make sure it didn't have excess inventory on Hand in comparison to Palm which apparently didn't plan things out as carefully.

    Hand thought at the beginning of the quarter that they had excess Treo 300 inventory which would mean that additional Treo 300 production would be modest. What we appeat to know presently from both Mirandu and from the poll running on Treo 300, is that sales for Treo 300s are running well above Hand's prior expectations. November in particular was a killer quarter for Hand in Treo 300 business. Now it is beginning to look like European sales are starting to ramp up a bit. Finally, there are logically some inventory orders from TMobile this quarter as they gear up to introduce their cobranded phone.

    So unexpectedly high demand, and a potential parts shortage could create a situation where Hand had to cut back on something to make their supplies last. Frankly, Sprint would get priority over the Treo 270 because of their strategic importance to Hand. Also Hand wants to clean out its Treo 180s as much as possible. I think it is entirely possible that Handspring did not anticipate the volume of orders that they are receiving this quarter. They talk about this in Pilot Palm. They call it the whoosh. That is the point 9 months after introduction when sales finally take off because the word of mouth builds to a point where customers start figuring out that Hand is the answer. BTW, November is the 9th month.

    Thanks for the insight.
  4. #24  
    This has gotten way into speculation, and far beyond my knowledge.. but we have to remember that we do not know what Handsprings expectations are.. None of the Treo's to my knowledge are out of stock on HS's website, so you really don't know about what their suppply vs. demand is. I do not know details of whats up with the 270.

    I think that you have it (rvwink) in your second paragraph.. This could very well be the woosh. Again, I look forward to this confrences earning's reports.

    Or it could not... I'll let these kind of discussions thrive on the yahoo boards though We aren't much stocks here rvwink
    -Michael Ducker
    TreoCentral Staff
  5. #25  
    Respectfully, we do know what Hand's expectations were because they told us at the last cc.

    They were expecting for sales to increase from $49 to $55-$60 million. They though the contribution from Treo 300 would be down significantly because the inventory had already been built in the system. They thought Treo 270 contribution would rise significantly because of the sell in of inventory as the result of the patch availability. They thought Treo 90 would sell well, but frankly it is not that critical a part of the overall volume, and it is offset by drops in Visor sales so it doesn't make a significant upward contribution.

    I made what I thought was a reasonable assumption about inventory build for Treo 270. I thought 8 service providers at 5,000 units each was reasonable or 40,000 units. I thought Hand had preshipped 30,000 units of the Treo 300 in September so the inventory situation is positive by roughly $4 million. Then perhaps Hand would sell through an extra 13,000 treo 300s because it was available for 3 months instead of 2. which is worth another $5 million and there is the targeted number.

    Now look at what actually happened. Instead of increasing treo 300 shipments by roughly 50% in the December quarter from 26,000 units to 39,000 units, the actual number currently looks like it going to be roughly 60,000 units, which means they doubled the previous quarters treo 300 sales to consumers. On top of that, I think corporate sales is making progress and selling perhaps another 10,000 units on top. So my take is that Hand is dramatically above its own prior expectations from last quarter. The problem was the poor progression of numbers made Hand pessimistic. The lowered their previous guidance dramatically. The survey shows that we went from 35 buyers in August, to 10 buyers in September and the first half of October probably wasn't that much better. So what would make the optimistic? The favorable surprises were lower data prices, lower handset prices, more advertising, a failure of competition to show up, a whoosh, and more satisfied treo owners talking to other about their devices on Treo Central, suddenly we went from 10 to 26 which was not that big a deal, but then 46 which is 450% above what they recorded two months earlier.
  6. #26  
    good analysis.
    -Michael Ducker
    TreoCentral Staff
  7. #27  
    Here is some news you probably don't know Mirandu.

    The Wyndham Hotel chain is replacing their rim devices with Treo 300s for their gm and top executives. They have about 150 locations.

    Learned it at the Sprint investors conference. There are over 400,000 Vision users presently by the way up from your previous number. Posted more info over on Yahoo. The call is interesting but very long and much of it is not relevant to my Treocentric existence.
  8. #28  
    hi rwvink, thanks for all your good postings. I did one posting on the Yahoo board, but the quality of the discussions are pretty low there compared to Treocentral. Did you know that the Sony Ericsson P800 will be released this coming week. I have read the specs and it will be an amazing device, but I am afraid they lost the xmas sales this year. Handspring has a small lead, but they need to release a new product next year to keep momentum. What I really miss on the Treo is the expansion slot. The Presenter-To-Go product, for example, works on most Palm handhelds, but no on the Treo 270/300. I love my Treo, but long-term investment in HAND is pretty risky. I wouldn't worry much about the low December figures in the Treo 300 poll. Most new Treo owners are not even aware of Treocentral. The December figures will continue to rise well into next year.
  9. #29  
    Excellent point, I agree. There are two distortions imo. First is a lag between reality and posting of reality. I think it takes a few days or maybe more before a new Treo user becomes confident enough to post on this board. Second, as the non geek population increases as a percentage of Treo buyers, the results of the Treo Central poll will understate Treo 300 adoption.

    I am amazed at what my own numbers show for what will happen in the GSM world next quarter. I think GSM sales will pass CDMA sales next quarter even though Treo 300 sales are accounting for about 2/3rds of revenues in December. If you pick a number like 25,000 units for China, and 25,000 units for gsm in the US and then expect continued growth in Europe and Asia, plus entry into other parts of the world, you end up with very dynamic GSM growth next year. Now if Hand could make an alliance with a European service provider. That would really shape things up nicely, but it is not required for my numbers.

    I happen to think the P800 is a loser of a product that will never get going. After all of this time, they haven't announced any service provider relationships. They are selling it in Europe but without significant service provider sponsorship. Also I think the US is not excited about a Symbian phone, and I think the price point is too high especially with the cameras included for everyone. I think they thought of the convergent device as a luxury device and they targeted the wrong market. Jeff tried designing a device as a partnership early in his career and he failed miserably. Too many features were included that needed to be omitted. Later Jeff learned that form factor had to decide what features were possible. Partnerships like Sony Ericsson don't seem to understand that.

    The reason I don't think the Treo investment is risky is that you can't knock Hand off until someone does it better. That someone cannot appear in a flash. He will have to be visible in Hand's rear view mirror. IMO, that competitior is no where to be seen. I love the fact that even people who are feed up with Treo because of frequently repairs, have not other place to go. I think that will continue to be the case.

    I read that 7135 will be priced at $700+ and they lack a keyboard and will not appear until sometime next year on Vz. No I don't think that price point works for them either. Also Hand has a gigantic head start in applications for emails and other helpful tools that will not be compatible with 7135 out of the box. Finally, I think it will take even Kyocera a couple of months to shake out the difficulties. Also most importantly, Hand's next generation product will, I believe, put them even farther ahead of the existing competition. My numbers, because of the huge increase in GSM revenues next quarter indicate breakeven is possible in March. Once Hand reaches breakeven, there is no way imo, that they won't succeed in keeping a meaningful share of the convergent market that they helped found. I just don't know who can knock them off, particularly if they establish other sprint type relationships and make their products easier to set up.

    Can you give me a little insight into your background?
  10. #30  
    Hey Guys:

    Now that the holiday season is coming to an end, we need to update our numbers. Do you guys believe that December was particularly strong? I get the sense from travelling across Europe that the Treo 270 is doing extremely well. I bought mine in Septmber from a large store in Paris (FNAC). Then in October I tried to pick up 2 more Treos for friends and it was out of stock. The product is indeed attracting a lot of attention. In my opinion, RVWINK's estimate of 100,000 units sold this quarter is aggressive but not out of the question. Lets continue this thread..
  11. #31  
    After reading thru this thread I have just one comment to add:

    Earlier, someone asked about the value / viability of the Treo 180.

    I've been thinking about it, and the 180 makes perfect sense as an enterprise platform. If they add the backlit keyboard, all the better.

    As an employer, I'd move my Sales Force and Field Technicians to 180's because the $99 or better pricepoint is attractive. I don't care about colour. Note that Blackberry does fine w/o colour as an enterprise tool. In this type of product colour is for consumers and senior executives, not the enterprise. Plus, people working in the field need an LCD that will not wash out in sunlight.

    They just need to get the GPRS working on Cingular, and we'd actually consider it. Also, whether it's Vision or GPRS, it needs to be as reliable as a Blackberry, though obviously it will be years before it has anywhere near the coverage.

    Finally, the enterprise is a huge, gigantic market for HS in 2003. I hope they have a specific plan to attack it. Perhaps the 180 will be part of that plan.

  12. #32  
    I agree with you Rbrar that at $99, the Treo 180 is a compelling bargain. But I have the impression that the cost difference between color screens and b&w simply doesn't justify the current price differential. I think this is a closeout sale to get rid of excess inventory, not a long term price.

    So I can update my estimate, I would like to ask Miradu a favor. It is very hard to evaluate the survey results currently because Christmas means Treos given as gifts and more than likely a higher percentage of non Treo Central type buyers. The total for December looks very weak so far on the survey, but the Amazon ratings for the Treo 300 make it look like it is still selling strongly. Could you possibly share a data point as to whether December sales of the Treo 300 are markedly slower than November sales?

  13. #33  
    Projecting from the strong results in November to how December would do was unclear. While seasonality indicated the possibility of a strong Christmas buying season and with two strong monthly increases basck to back, it looked like sales momentum might continue upward. But December sales appear to have slowed instead from the Decmeber highs. As a result, I am dropping my numbers modestly lower:

    Im guessing about 52,000 Treo 300s sold through to consumers this quarter plus say 8,000 units in corporate sales, for 60,000 Treo 300s. I am currently projecting Treo 270 sell through of approximately 20,000 units, and approximately 16,000 Treo 180 units for a total of 96,000 Treo units sold through to buyers this quarter more than a 100% increase over the 44,000 last quarter.
    Inventory computations are roughly 40,000 new Treo 270 units internationally less 30,000 preshipped Treo 300 units in September for a plus 10,000 units to start. Then say another 30,000 new inventory units to Tmobile and or AT&T in December for a total of 137,000 units over all. I think Treo 90 revenues were a tad disappointing because Hand is still offering a dvd player for the purchase of Treo 90s on their website indicating that their Treo 90 inventories were still a bit high. I am guessing about $17 million in revenues for the organizer and accessory market.

    Adding it up, I am working with $48 million in communicator revenues plus $17 million for a total of $65 million, modestly above the $55 to $60 million estimated previously by management on the last cc. This number is modestly changed from what I posted elsewhere because the numbers continue to evolve as the data changes slightly. In this case the numbers on the treo 300 survey have recently been moving up nicely giving me a tad more confidence on the December numbers than previously.
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