Palm Pre goes on sale amid lines, tight supply

A number of stores sold out of the much-hyped Palm Pre amid tight supply, according to reports. Customers across the country lined up during the launch weekend to get the phone, which Palm believes will turn around its fortunes and Sprint Nextel hopes will attract postpaid subscribers. However, the lines were not the kind that stretched for blocks, as when Apple's iPhone first launched two years ago.

Sprint also held launch events in various cities across the country for select customers Friday ahead of Saturday's nationwide availability. FierceWireless covered a launch event in New York City, where many long-time Sprint customers waited in line for the Pre.

Various analysts described the launch as a success. Jonathan Atkin, an RBC Capital Markets analyst, told Bloomberg News that he thought fewer than 100,000 Pre units were sold during the weekend. Other analysts predicted that as few as 50,000 to as many as 200,000. Both Sprint and Palm declined to comment on sales of the Pre.

For the full year, UBS expects Palm to sell a total of 1.6 million Pres, while iSuppli expects around 1.1 million Pre sales. The numbers would be a boon to Palm, given UBS estimates a gross margin on the product of 33 percent. However, Pre sales may not represent Sprint's Holy Grail; UBS estimates Sprint will add 330,000 gross subscribers by the end of 2009 via the Pre, which equates to around 2 percent of the industry's gross adds.

Meanwhile, customers are reporting some glitches with the Pre, according to the blog Engadget. There were various reports of distorted or discolored displays and unexpected system shutdowns. One glitch that had many users upset was the apparent inability of text fields in the Pre's Web browser to support symbols that are not available on the phone's keyboard.

With the Pre launch officially underway, industry watchers now can speculate about Palm's next steps. In a Friday press release, iSuppli posited on whether Palm will release a GSM version of the Pre this year, potentially destined for international markets, and whether Palm will license its webOS platform to other manufacturers (as it did with the original Palm OS). The company hasn't made official announcements on either front.

And beyond the Pre, all eyes are now on Apple, which is expected to unveil a new version of the iPhone later today at its developer's conference in San Francisco.

For more:
- see this Reuters article
- see this Bloomberg News article
- see this San Jose Business Journal article
- see this Engadget post

Related Articles:
Hesse: Pre launch is 'coming-out party' for Sprint
Review roundup: Palm Pre
Sprint, Palm planning 'war rooms' for Pre launch
McAdam: Verizon to sell Palm Pre, Android phones
Sound off: Palm Pre