Just as Palm Pre hype has reached a deafening roar, out comes news of a second new Palm mobile and wireless device, code-named Pixie, as well as analyst feedback that Palm is facing hardware and software issues with the Pre and that Sprint doesn't inspire users to switch carriers.
Palm
is reportedly working on a follow-up to its soon-to-be released Pre smartphone
called the "Pixie," which some suggest is a smaller version of the
new handset that could further challenge the Apple iPhone.
The Washington Post is one of
several publications that are reporting that the Palm Pixie will be a candy bar-style
phone, geared toward the lower end of the market, with a $99 price point.
The Pixie will use the same WebOS operating system as the Pre and have a
fixed keyboard. It will reportedly be released a few months after the Pre-which
is expected to arrive in June, if not sooner.
It's unclear whether the Pixie is a definite go or dependant on Pre sales,
according to the Post.
At the same time that
Palm is said to be experimenting with different
versions of its new smartphone, some are beginning to ask whether the Palm Pre
will meet the high expectations set for it by
analysts, developers
and
backers.
In an April 30 research note, Ashok Kumar, an analyst with Collins Stewart,
wrote that Palm is experiencing some problems with the Pre that could put a damper
on the enthusiastic response that the smartphone has received so far.
"Supply chain checks indicate that due to multiple hardware and
software issues, Palm has dramatically reduced its production orders for Pre
with its ODM partner," Kumar wrote in the research note. "The Street
currently has modeled over 1 million smartphone unit shipments for Palm in
[second half of 2009]. We believe this is highly unrealistic."
Bloomberg
has reported that, alternately, Palm may stockpile devices, wanting to
heighten the sense of demand.
In the note Kumar also questioned the promise of the Sprint network. "Sprint is the only major carrier
that has signed on to sponsor the Pre platform," he wrote. "Sprint,
which has only a third of the subscriber base of either AT&T or Verizon,
has been losing customers due to structural problems."
Tina Teng, an analyst with iSuppli, predicted that Sprint will offer the Pre
for a subsidized price of about $200 (reportedly the
Palm
Pre costs $170 to produce), and Kumar wrote that this price point is
essential.
"In our opinion, it is highly unlikely customers of AT&T or Verizon
will switch to Sprint," Kumar wrote. "Across the pond, carriers are
taking a wait-and-see attitude given the high platform cost and lack of
conviction on sell-through. If Sprint does not match or beat AT&T's
subsidized iPhone price of $199, which translates to a subsidy in excess of
$200, the Pre is DOA."
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