Sprint
People began lining up outside Sprint stores in New York, Boston and Cherry Hill, New Jersey, at 5 p.m. yesterday. Sprint, which has trained staff for weeks and held promotional events with the likes of Jerry Seinfeld, may sell almost 200,000 phones this weekend, some analysts estimate.
Palm aims to win back customers for smart phones, a market it helped create, after devices from Apple and Research In Motion Ltd. prevailed with newer features and operating systems. Palm hired retired iPod chief Jon Rubinstein in 2007 to develop the Pre. Palms shares have quadrupled this year and Sprints have almost tripled in anticipation of its release.
“For Palm, whats at stake is its reputation,” said Andy Castonguay, a research director at Yankee Group in Boston. “This is, I think, without exaggeration, a fundamental step forward if the company is going to continue to be relevant.”
The Pre, selling for $199 with a two-year contract and mail-in rebate, has an operating system that combines calendars, contacts and messages from different accounts. It synchronizes with Apples iTunes music store and has a screen that lets users zoom in and flip through applications without closing them. Customers can pay $70 more for the wireless Touch Stone charger.
Apple declined to comment, said Steve Dowling, a company spokesman.
Shortages Possible
Jordan Harding, 26, sat in a folding chair outside a Sprint store in midtown Manhattan with a beach umbrella his only shield from the pouring rain. A concert promoter, he currently uses RIMs BlackBerry 8830.
“I could get by with my BlackBerry for just work but I want something thats more diverse,” Harding said. “Im not ready to lose my Blackberry, so Im holding onto it for now in case the Pre isnt quite as robust with its e-mail functionality.”
Palm may sell about 150,000 Pre phones this weekend, Lawrence Harris, an analyst at CL King & Associates in New York, said in an interview. Piper Jaffray & Co.s Michael Walkley puts the number at almost 200,000. Harris rates Palm shares “neutral” while Walkley advises clients to buy them. Paul Coster, an analyst at JPMorgan Chase & Co., estimates weekend sales of more than 50,000.
Sprint and retailer Best Buy Co. said there may initially be Pre shortages while manufacturing ramps up to meet demand.
Pre buyers need to sign up for Sprints Simply Everything plans, which include unlimited data and messaging and start at $69.99 a month. AT&T Inc. charges iPhone users the same amount without messaging, according to the companies Web sites. The Pre is also available at Best Buy, RadioShack Corp. and some Wal-Mart Stores Inc. locations.
Sprint, the third-largest U.S. wireless operator, has exclusive rights to the Pre through at least the end of the year. Larger rivals Verizon Wireless and AT&T have said they are interested in carrying the phone.
Palm fell 64 cents to $13 yesterday in Nasdaq Stock Market trading. Sprint rose 8 cents to $5.11 on the New York Stock Exchange. Apple climbed 93 cents to $144.67 on the Nasdaq and has gained 70 percent this year.
Sprint, based in Overland Park, Kansas, is rolling out new devices, possibly including one based on Google Inc.s Android operating system, to win back customers after losing more than 4 million contract subscribers in the past year.
Palms annual sales havent grown since 2006. Analysts say they will continue to drop the next two quarters, even with the Pre, according to estimates compiled by Bloomberg. Venture capital firm Elevation Partners has invested $425 million in Palm and owns about a third of the company.
Smart-Phone Summer
Sprint and Palm arent alone in releasing new phones. The Pres debut coincides with Apples annual developers conference. Cupertino, California-based Apple has said it will unveil a new operating system for the iPhone next week. Chief Executive Officer Steve Jobs has demonstrated a new version of the iPhone the past two years at the conference.
Verizon Wireless, the largest U.S. mobile company, has said it has new BlackBerrys from Waterloo, Ontario-based RIM, as well as an Android phone in its lineup.