Analyst: Palm will sell 1.5M Pre devices in first year

Palm will sell 1.5 million units of its new Pre smartphone in the first year of its U.S. launch, an analyst at Citi has predicted.

The analyst, Jim Suva, said while Palm is still expected to face large losses over the next few years, Citi had an optimistic view of unit sales. Citi went on to note that it was taking conservative views on what the Pre's average selling price and margins would be, and that Palm needed to provide more details on its pricing strategy for the smartphone.

The phone, which was unveiled last week at the Consumer Electronics Show in Las Vegas, will be launched exclusively by Sprint Nextel some time in the first half of 2009.

The company, which once had reliable hits with its Treo and Centro smartphones, has used sales of the now-relatively low-margin devices to keep it afloat. Palm posted a $506 million loss last month in its fiscal second quarter, and saw its sales fall to $171 million, a 39 percent drop in revenue.

Though the smartphone maker got a boost of confidence recently with a $100 million capital investment from Elevation Partners, the onus has been on Palm to deliver something extraordinary that will revive the company's flagging prospects. Palm has struggled to maintain its relevance in the U.S. smartphone market, which is increasingly being dominated by Apple and Research In Motion.

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