Palm Pre on Track for Early June Launch, Analyst Says

The Palm Pre, the smartphone being touted by some pundits as a potential "iPhone killer," is apparently on track for launch in early June, according to an analyst from Barclays Capital. Based on that estimate, Barclays is raising its sales estimates and targets, although the company cautions that higher cost expectations could limit the ultimate benefit to long-suffering Palm. 

"Expect fairly solid initial demand and additional launches to potentially begin in [the third quarter], thereby leading our PF annual sales [estimates] higher to $975m/$1.9b from $818m/$1.4b," Amir Rozwadowski, an analyst with Barclays Capital, wrote in a May 18 research note.

Rozwadowski suggested that completed "checks" suggested the Pre launch would occur on schedule, with "additional carrier launches" to follow in the third quarter. Additional WebOS product launches are also "anticipated" to emerge after that point, although a lower-cost device appears unlikely before the first quarter of 2010.

Despite that relatively rosy picture, Rozwadowski said he felt that issues with some of the company's legacy products, and the increase in costs associated with the Pre launch, would drag on Palm's potential revenue and profitability.

Sprint Nextel has exclusive U.S. rights to sell the Palm Pre through the end of 2009, and plans to offer customers a choice of individual, family and business plans that start at $69.99 a month. In addition to the much-publicized physical QWERTY keyboard that slides out the bottom part of the 4.76-ounce unit, and the 3.1-inch touch-screen with 320 by 480 resolution HVGA display, the phone will also include the Palm WebOS, built-in GPS, a 3-megapixel camera and 8GB of user storage.

Supported audio formats for the device are MP3, AAC, AAC+, AMR, QCELP and WAV, supported video formats are MPEG-4, H.263 and H.264, and supported image formats are GIF, JPEG, PNG and BMP.

Perhaps recognizing the device's make-or-break status with regard to Palm's future profitability, Palm is taking all steps to ensure that the Pre has a robust launch, and is encouraging developers to design applications for the Pre.

Reports suggest that Palm is already working on a smaller follow-up to the Pre called the Pixie, which also runs the Palm WebOS, at a probable $99 price point.

Palm has a good deal riding on the Pre, given how sales of its older smartphones have been steadily eroding. In March, reports stated that Palm had remarketed 18.5 million common stock shares, worth roughly $103 million, in order to raise cash for the Pre's development and marketing. Palm recently endured its sixth consecutive quarter of losses, with revenue for the third quarter of 2009 falling to roughly $90 million.