1.  10/01/2009, 12:31 AM So I happened to stumble across this tidbit from Palm's recent quarterly report from September 17: "We have accrued rebate obligations of \$51.2 million as of August 31, 2009" I know Pre pricing has gotten jumbled lately, but I believe at the quarter end date of 8/31, the Pre was still selling with a \$100 rebate at all vendors (some pre-processed the rebate such as Best Buy, but it was still a rebate). Anyhow if we take \$51.2 million and divide by \$100, that gives 512,000. Assumptions in that 512,000 number are: 1) Each buyer sent in the rebate. If only 90% sent in a rebate, that would increase the sales number to 569,000. If 80%, 640,000. 2) Palm wasn't offering any other rebates in this time period. If there were other rebates, then the portion of that \$51.2 million due to the Pre would have been lower, so sales would have been below 512,000. From what I can see, the Treo does have a rebate, so that tends to say Pre sales would have been below 512K based on this factor alone. I don't know if this gives us any more info, but it's another stab at sales numbers. In reality, the number could be anywhere in the 512K ballpark because of both of these factors, and many more beyond my reasoning. Out of the 813,000 total unit sales last quarter, 512/813=63%, which is the kind of "majority" Palm was hinting at for Pre sales.
2.  10/01/2009, 01:02 AM Originally Posted by s219 So I happened to stumble across this tidbit from Palm's recent quarterly report from September 17: "We have accrued rebate obligations of \$51.2 million as of August 31, 2009" I know Pre pricing has gotten jumbled lately, but I believe at the quarter end date of 8/31, the Pre was still selling with a \$100 rebate at all vendors (some pre-processed the rebate such as Best Buy, but it was still a rebate). Anyhow if we take \$51.2 million and divide by \$100, that gives 512,000. ... You may have stumbled on to something that gives a clue, but I don't think it's definitive. "accrued obligations" would not include payments already paid, would it? Seems that would be the units sold, still within the rebate period, but not yet paid.
3.  10/01/2009, 06:40 AM companies do the mail-in rebates because they have shown statistically that only 50% submit the rebates. Of course there is Best Buy that gave instant rebates to think of. Originally Posted by s219 So I happened to stumble across this tidbit from Palm's recent quarterly report from September 17: "We have accrued rebate obligations of \$51.2 million as of August 31, 2009" I know Pre pricing has gotten jumbled lately, but I believe at the quarter end date of 8/31, the Pre was still selling with a \$100 rebate at all vendors (some pre-processed the rebate such as Best Buy, but it was still a rebate). Anyhow if we take \$51.2 million and divide by \$100, that gives 512,000. Assumptions in that 512,000 number are: 1) Each buyer sent in the rebate. If only 90% sent in a rebate, that would increase the sales number to 569,000. If 80%, 640,000. 2) Palm wasn't offering any other rebates in this time period. If there were other rebates, then the portion of that \$51.2 million due to the Pre would have been lower, so sales would have been below 512,000. From what I can see, the Treo does have a rebate, so that tends to say Pre sales would have been below 512K based on this factor alone. I don't know if this gives us any more info, but it's another stab at sales numbers. In reality, the number could be anywhere in the 512K ballpark because of both of these factors, and many more beyond my reasoning. Out of the 813,000 total unit sales last quarter, 512/813=63%, which is the kind of "majority" Palm was hinting at for Pre sales.
4.  10/01/2009, 08:47 AM doesnt Sprint pay the rebate?
5.  10/01/2009, 09:25 AM Originally Posted by hparsons You may have stumbled on to something that gives a clue, but I don't think it's definitive. "accrued obligations" would not include payments already paid, would it? Seems that would be the units sold, still within the rebate period, but not yet paid. It was mentioned in the context of the entire quarter's liabilities, so I was under the impression it was the overall tally for the quarter. Here's the full text: "The reserves for price protection and rebates are recorded at the time these programs are offered . Price protection is estimated based on specific programs, expected usage and historical experience. Rebates are estimated based on specific programs, actual wireless carrier purchase volumes and the expected percentage of customers that will redeem their rebates, which is estimated based on historical experience. Rebate estimates are refined over the program period as actual results are experienced. We have accrued rebate obligations of \$51.2 million as of August 31, 2009 which were included in other accrued liabilities. Actual claims for returns, price protection and rebates may vary over time and could differ from our estimates." I'm already on my second cup of coffee, and that was still painful to read...
6.  10/01/2009, 09:44 AM So it sounds like they took total sales of Pres and came up with the number of what 100% payout of rebate at 512,000 units. [QUOTE=s219;1937344]Actual claims for returns, price protection and rebates may vary over time and could differ from our estimates." QUOTE]
7.  10/01/2009, 11:18 AM Originally Posted by s219 It was mentioned in the context of the entire quarter's liabilities, so I was under the impression it was the overall tally for the quarter. Here's the full text: "The reserves for price protection and rebates are recorded at the time these programs are offered . Price protection is estimated based on specific programs, expected usage and historical experience. Rebates are estimated based on specific programs, actual wireless carrier purchase volumes and the expected percentage of customers that will redeem their rebates, which is estimated based on historical experience. Rebate estimates are refined over the program period as actual results are experienced. We have accrued rebate obligations of \$51.2 million as of August 31, 2009 which were included in other accrued liabilities. Actual claims for returns, price protection and rebates may vary over time and could differ from our estimates." I'm already on my second cup of coffee, and that was still painful to read... I've bolded the relevant parts. Generally, in accrued liability siituations, companies estimate and "reserve" the amount of things like warranties, rebates, etc., They base it on a percentage of sales or whatever (generally based on historical data). So, if historical data indicates that only 60% of people who purchase phones will actually go through and file for rebate, then the accrued obligation is 60% of sales (which, I've heard figures that they are around 60%) = 51.2 million. Which means, of course, that the sales count is MORE than 51.2 x 100 rebate. If the number holds for Palm and Sprint, then really, we'd be looking at \$51,200,000 / 100 = 512,000 units that ARE rebated. 512,000 units rebated / .6 rebate rate = 853,333. Problem...not all of these are pres. This actually matches well with the sales rate of 810k units sold last quarter in total for Palm but doesn't give information on how it breaks down, unless we know exactly how the 51.2 million rebate goes per phone. What we need to know is what the historical rebate file rate has been for Palm...this may be included in a footnote in their financial statements... Last edited by subversiveasset; 10/01/2009 at 11:45 AM.