Palm Pre sneaks in ahead of Apple show, with June 6 launch
Published: 20 May, 2009
Continued ...
Palm is at least achieving the PR feat of launching its flagship - and no doubt ensuring the usual photos of long queues outside stores - just ahead of Apple's Worldwide Developers' Conference, on June 8-12, at which it will talk up the iPhone 3.0 software and could show off new devices.
Sprint thinks it will have some idea of how Pre will perform by the time that conference ends. "I'm pretty sure we'll know within the first week," Kevin Packingham, senior VP for product and technology development at the operator, told The New York Times. "It's the highest confidence I've ever had going into a device launch that this is going to be a blockbuster," he also said.
However, some still think Apple will pull off a disruptive move and introduce a cheaper iPhone just two days after Pre ships, forcing Palm to lower its prices too - and AT&T is also widely rumored to be about to cut the required data plan commitment for its flagship phone. That could eat further into Palm's margins. Colligan said at MWC that the firm was aiming to return to gross margins of 30%-plus "in the long term", addressing the major challenge the device maker has in competing on price with rivals that have far greater economies of scale and, in many cases, phones that are less sophisticated and expensive to develop and build than Pre. Within the relatively high margin enterprise niche that Palm used to inhabit, it was acceptable to be competing from outside the handset top 10 - when taking on the big five, plus Apple and the old enemy RIM, the figures are harder to balance.
In a recent research note, investment analysts JRPG commented: "Pre is a very nice phone. Our going forward concern is the same as our primary concern for Research in Motion - margins. Relative to competitors both are smaller companies with less buying power or manufacturing expertise. ... The success of the product is likely to make or break the company."
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