Sprint CEO expects Palm Pre shortages, sleeping bag sales skyrocket
By Thomas Ricker 
posted May 20th 2009 7:26AM
posted May 20th 2009 7:26AM
"We don't intend to advertise it heavily early on because we think we are going to have shortages for a while. We won't be able to keep up with demand for the device in the early period of time."If true, if troubled Palm can't meet demand then this is certainly bad news for investors in a white-hot smartphone market with plenty to entice rejected Palm hopefuls this summer. Then again, Nintendo drove gamers nuts (and some would argue, artificially inflate demand) for almost two years with its chronic Wii shortages. Problem is, Palm isn't as fiscally solvent as Nintendo was in 2006... by a long shot.
[Via everythingpre]
Hrm, I wonder if all the new Sprint users will hammer the network so bad, my already shit signal will drop down to nothing at all?
If you want to read about rumors, how about the rumor making the rounds that only =30,000= Pres are going to be available on launch!?
I like that one especially...lol!
At least Palm would get a nice betatest group for their WebOS servers, eh?
Hmmm...maybe that's not such a bad idea.
Can someone help me with this... I'm over is Australia so I don't get your networks - but from a little googling, Sprint has a slow and crap 3G technology? So how can this phone be compared to others that will have a much faster download rate etc.? Does anyone know comparison speeds...
A site I was reading pegged it at bursts of 2.4 mbps - a third of now standard HSDPA speeds... is this right?!
@dtothem
No one ever gets the advertised 3G speeds. At least where I am, Sprint has the fastest 3G, faster than both Verizon and AT&T (AT&T's 3G is crap here, not coverage, but speed). And seriously, 2.4 Mbps is plenty on a phone... what you have to worry about is latency which is going to be a factor no matter what 3G service you're using.
@dtothem
Yeah, every carrier likes to advertise that they have the fastest 3G network. The truth is, is they all have good speeds in some areas, and bad speeds in others. Gizmodo did a somewhat informal test and found Sprint's to actually be the fastest.
http://gizmodo.com/5111989/the-definitive-coast+to+coast-3g-data-test
A lame attempt at trying to create hype... even more lame coming from the CEO.
I will be getting me a Pre though.
Let's see... The Pre is launching at four different retailers (Sprint included) on the same day, A few months ago it was mentioned that the Taiwan company manufacturing the Pre can produce and ship a couple hundred thousand units within a week. I would say this is a great marketing strategy, put out information that there will be shortages, more people will come. In Feb analyst who were predicting a March, April launch were saying Palm would only have 375,000 units had Palm launched in those months. My prediction?... Palm/Sprint will have at least half a million units at launch.
I'm not convinced that people are going to switch to Sprint just to get their hands on a Pre. No worries on your signal; most of the people buying this will likely be current Sprint customers upgrading to a smart phone.
Sprint actually is the only one in the US right now with 4g..
They won't need to advertise it because of all the free PR they will get by having shortages.
they dont wanna advertise it until they have money from the first batch to make the second batch, lol, joking aside i think things are nearly that bad, the investors dont wanna loose money
Do you honestly think that after all this sprint advertising and all the hype and the fact that the PRE is PALM'S last hope and the first major competitor to the iPhone they'd have shortages at launch?
Palm couldn't very well risk over-manufacturing units they couldn't sell. Everyone hopes for great demand and that the hype actually works, but it doesn't always. The reasonable approach is to manufacture a reasonable number of units and then if demand is steady, to increase supply slowly.
People whine about the Wii endlessly, but everyone and their uncle's pet fish was also bemoaning how it was just a fad in the early days and the sales would plummet eventually. I think Nintendo was actually (secretly) worried that they'd be ramping up production just as demand fell off--and imagine the press coverage that would have entailed. Not to mention the cost of canceled manufacturing contracts and surplus supply.
Uh huh.
Massive demand, few Pres.
Uh huh.
To both thoughts.
Or they can have lots of units and little demand. Wont that be better?
You cant win either way. That's why they all do it. Apple, Sony, MS included. Have the shortage, get the PR.
It's far better to have too few with people willing to buy. Making those devices cost money, and they would rather have as few as possible sitting around.
@ Look_Around_You - actually the best thing is to have savvy management that can pinpoint demand rather than play darts and guess and hope they don't get caught flatfooted or with a glut. Of course we are talking about Palm here and they wouldn't know a "power button" from a "belly button."
Palm needs to get product in hand. It's not hype that sells this stuff it's word of mouth. There was plenty of hype over the Storm, but as we know the word on the street was that it wasn't ready for prime time. The result... they are now "buy one, get one free." Blackberry is much stronger than Palm though, and they were not relying on the Storm so it was hardly a setback. If the Pre loses momentum Palm is done with the next iPhone weeks away.
But if they're hard to come by they become more of a status symbol which will drive demand up further than if they had figured the correct amount to begin with.
Also you don't make the news with stories like, "I wanted a Pre... and I got one!"
News = "ZOMG lines around the block 2 days before release!"
@neojew
That is precisely what the deal is.
The few that have one will become walking billboards, just like with the Wii.
The advertisement hasnt been there, so the Pre awareness hasn't even reached a crescendo.
Word of mouth advertising is cheap and spreads the hype faster than a network buy.
On top of that, Palm sees steady but consistent growth from sales of the Pre instead of a short spike.
Would seem like a somewhat smart marketing strategy to me.
I know a lot of people here want the Pre but I don't know how many people in the real world who aren't so tech savvy are dying for a Pre. But by saying there is a shortage, this guarantees they will sell out immediately. Everyone and their mom will be at the store to buy one or to resell it on eBay to the highest bidder. Without artificial urgency, I don't think it will sell out as quick because people may wait to see some real reviews before dropping the $$.
Just my opinion.
Am I the only one who thinks Palm screwed this up by not keeping a tighter lid on it for the last few months? Seriously, I'm bored with the Pre by now. It feels like it's been around for months already.
So you were bored with all the Iphone HYPE also, cause that got the 6month hype machine 100X more. in this age this is how you sell a big product..GET OVER IT.
Not to mention the iPhone G3 hype, the iPhone 3.0 hype, and the rumors about iPhone.
Then there's:
Iphone speaker dock stories.
Trite iPhone app stories.
iPhone attached to some device to make it do something weird stories.
Ooooh the iphone was seen in an episode of ( ) stories.
But 5 months of occasional Pre stories is wearing thin?
I think it's more that we've been waiting for the Pre for so long and it's not actually out, whilst knowing pretty much exactly what it's capable of, whereas with an iPhone it's all just speculation and rumours until they announce it, because Apple tend to release it about a month after announcing it. For example, nobody really knows what to expect with the new iPhone (well, nothing major but still..) making it more interesting closer to launch.
Blah blah blah. When did we start listening to CEOs when it came to prduct hype and paunches. This guys job is to sell his product any way he can. And their all pretty known for making dumb comments.
Still ill be buying my Pre DAY1. Hopefully!
okay. This. is. Bull. Shi#
There is an advertisement to the right (300x250) banner ad that is advertising the Pre. And one up top (728x90). Spring couldn't whore itself out enough for the Pre. And then that brings up the point about Dan Hesse. We didn't like you in your own commercials Dan, and we don't like you telling us there are Pre shortages. You have officially lost your talking privileges. Hang on while I go get the duct tape...
Do you need to be reminded of the epic "whoring" that took place for the iPhone?
that in many ways is still taking place?
Wait... this website has ads?!?
[thanks adblocker]
@ Look_Around_You,
Have you got some kinda personal crusade against the iPhone or something?!
I'm pointing out the sheer absurdity of the OP statements that a few banner ads somehow is "whoring" by comparing it to the sheer number of references to the iPhone on a daily basis.
@ Look_Around_You,
Apple did advertise the hell out of the iPhone.No big deal. The difference here is the CEO of Apple (Steve Jobs) didn't say there were shortages so they "don't intend to advertise". The CEO of Sprint did. Yet they are advertising everywhere! That was the point.
costs of advertising online is cheaper than buying tv ad spots on a specific channels in specific time slots. and trying to target the right audience, is much more difficult. at least with online advertising, your audience will always see the ad regardless (with exception of ad blockers) and they can target to tech blogs where it is much easier to reach your intended target audience. it is also much easier to guage interest in your product by interaction - the click. with tv and radio, you have to hope that they are listening/watching it when the commercial is played. internet, doesnt go by these rules.
for a company,
internet advertising - effective, cheap, simple targeting, ready- made niches, basically everything already sorted for you = awesome value
vs
tv/radio - really just wishful thinking that you get the right people interested. commercials for most people usually mean break time, bathroom, food, do other stuff.
surprise, surprise
Nice way to avoid sales figures comparisons with other smartphone launches, and generate "Pre is sold out in the first 12 hours of availability" headlines.
Hey, it works for everyone else.
I don't think I have ever been less excited than I am by the Pre. Good Job.
So why did you read this story and post?
I am glad you took the time to share that with us all. We were very worried. thank you for coming..Good day Sir!
Sounds like 'ol Look Around You is preparing for his soon-to-be-case of buyers remorse.
Um, I have a phone. I'm also I'm on AT&T.
And why would I have any remorse if I did buy this? That's a genuine question.
You may be the first Palm fanboy I've heard of! But as to why you'd have remorse buying a Pre...uh....have you -seen- the demos? I mean, how many different ways can you change the iPhone UI and say, "Look at our groundbreaking new phone!!!!". Yawn.
Of course, the Pre may be the next iPhone killer. Like Android. Oh wait.
@Frankfurter: You are annoying please leave this planet
"how many ways you can change the Iphone UI"
oh shut the hell up you stupid stupid troll.
"how many different ways can you change the iPhone UI"
haha, what a fucking tool. Yes, Apple invented buttons, scrolling, and even touchscreens! Everyone else has just been ripping them off.
@krische
man, oh man. invented? -_-
why does everyone think every phone with any piece of technology in common with the iphone is meant to be an iphone killer.
im surprised i got this far down the comments before i got sick of reading all this.
and yes, i have an iphone, but i dont go around claiming every touchscreen, or every haptic scrolling phone is meant to kill the iphone.
personally, i'm excited to test out a friends pre when he gets it. i understand that the simplified iphone os was revolutionary at the time, and i think that the pre has a similar thing going. html/css/js as applications on a phone? pretty interesting to me :)
cant we all just get along? :`(
''We don't intend to advertise it heavily early on because we think we are going to have shortages for a while''
what the hell every sprint add i had been seeing for the last month has a pre on it
Those aren't ads for the Pre - they needed SOME phone in the ad so their newest is it...right now. Sprint is launching some large number of phones in June (I think I read - like that HTC one) so I'd expect more than the Pre to show up soon.
Remember, Palm needs Sprint, Sprint does not need Palm.
Lol, so let me get this straight, your number 1 competitor is gonna unveil it's highly anticipated follow up to it's massively successful phone (2 days after your release) and you intentionally create a stock shortage?! Simple fact is once potential customers get fed up of waiting for the Pre to come back in stock, they're just gonna buy the new iPhone, Nokia N97, Storm 2, Omnia HD or Android handsets.
And on top of that, Palm need to sell as many units as possible and get some cash into that cash strapped bank account of theirs.
> ...they're just gonna buy the new iPhone, Nokia N97, Storm 2, Omnia HD or Android handsets...
Yeah, or this that'll be there =at Sprint= same time:
http://www.engadget.com/2009/05/19/htc-touch-pro2-for-sprint-spotted-in-the-wild-mid-june-release/
Not really. I'm not interested in the iPhone (since the Pre appeared). Neither am I in any HTC, Nokia or Android phone. If the Pre is as good as it is, people will rather wait. I mean people didn't want to buy a PS3 or XBox 360 instead of a Wii, they wanted the Wii, and they waited for it.
@ kadajawi,
I see what you're saying, but in the end how many people in the "mainstream" have actually heard of the Pre? With Apple's marketing you can bet your house on everyone hearing about the new iPhone. And have you seen the type of queues that thing creates?! No phone I can remember creates that type of hype and want in consumers. Palm need to make sure they have as much stock as possible, they are not Apple, they do not have the brand kudos needed to get people queueing up around the block.
Sounds like normal CEO FUD to me. If its a great phone ill sell the thing for you by getting all my friends and family to upgrade or move to sprint. In Westchester & NYC Sprint has great service. Dont care about other areas.
Read: We're having cash-flow problems and therefore can't ramp up production / go silly with advertising.
@Look Around You
Since when does Apple create shortages for their products? I bought the first gen iPhone 2 days after it was released, and I walked right into a heavy-traffic Apple store and walked right out with a phone, no line, no shortage. I also stood in line for the 3g the morning it was released, then actually stood in line with a friend later that day. We both managed to walk away with phones. I'm pretty sure Apple doesn't play the "shortages" game.
Agreed. As much as I dislike Apple and wold never own an iphone. I was a Value Added Reseller for Apple for quite some time and they were good about setting a ship date and having product on that date with new releases. They may announce early, but they always gave a ship date to us and kept it.
Anyone else notice that the counter for pre (the ads on this page) is messed up and says it is 46 days till June 6th? They may want to fix that
As another earlier mentioned, adblocker keeps some of us from seeing things like that. I just started up Internet Explorer to see what you were typing about.
Gack!
Sprint has got to be kidding getting that wrong on a site like this.
Attention to detail, eh?
I'm sure anyone who actually wants a Pre knows when it will launch.
he's mincing words. SPRINT will advertiese heavily, however PALM will not. Nevermind the fact the two most likely have a co-marketing agreement.
After selling a thousand pre's, Pre's CEO would announce, "Wow! we sold out in a couple of hours, demand is so high.... bla bla... bla..." But what he'll never mention is the amount of pre's sold.
Hey, if Amazon can do it, so can Palm.
Mark my words:
Palm will find a way to shoot themselves in the foot.
I really don't understand all the excitement. The Pre doesn't represent a superior choice over some of the soon to be launched smartphones. What does the Pre have that is so much better? Please enlighten me.
A very intuitive interface for multitasking. (the cards)
A simple way to automatically sync your email, contacts, and calendars with popular providors (Google, Facebook, etc)
Mutli-touch web browsing experience (only other phone is the iphone)
@krische
The Lg Arena says hi
http://www.gsmarena.com/lg_km900_arena-review-345p8.php
Oh didn't know there was another phone out there that supported it. Good to see it is starting to get more common. That still leaves two of my stronger points though.
Multitasking seems to be effortlessly simple on the Palm Pre. I haven't seen another phone that allows one to manage all of their open apps (one certain brand of "smart" phone doesn't even multitask).
Synergy is not only really neat, but seems to be the way of the future. It certainly beats the hassle and cost of MobileMe.
WebOS. Synergy, the new way to multitask (including Pandora pop up controls), the innovative way it handles notifications, the developer excitement = apps, being on a fast network.
This can be applied to any phone (your statement.) It's exciting because it does cool stuff and looks nice.
Oh yeah I forgot about the sweet ass notification system. It's makes notification systems like on the iphone seem ancient.
30,000?? Taking into account all the Sprint stores, all the Best Buy stores, all the Walmart locations to carry it, etc, that's probably only 1 per store or something. Talk about ridiculous. And you can't tell me that they couldn't manufacture more than that. That is probably like 1 day's worth of production in one of those factories in China. The Palm Pre fanboys have a right to be upset about this one.
I didn't hype that rumor as FACTUAL, merely that it for sure is making the rounds RIGHT NOW, for example:
http://discussion.treocentral.com/palm-pre/180256-hope-not-true-only-30000-units-launch.html
Lol!
Best Buy only opened their 1000th store in 2008.
Walmart has about 3935 stores in the U.S..
Sprint has around 1500.
So a little north of 6000 locations will need units.
Each will get 5.
Better arrive early because I didnt count online sales.
First the mail in rebate scum, now this. Thanx a lot Palm.
Android ftw.
lol, if you're going to complain about the five minutes it takes to fill out a MIR form for ONE HUNDRED DOLLARS, then you are a lazy idiot. Put it this way, if I were to tell you to put your name and address on a card and mail it to me, and I'd send you $100; would you do it?
or lets even put it this way. Let's say it takes you 10 minutes to fill out the few lines on the form stapled to your receipt you need. That is like someone paying you $1,200/hr.
You mean the same Android with only 1 phone available in the US with a battery life of 3 hours?
Yeah...3 hour battery life FTW...
Go to a Best Buy or Radio Shack to beat the rebate. People love to make something out of nothing.
Yea I just don't understand ppl complaining and complaining about the MIR, even giz has made a full article on the fact that "The real price of the Pre is 299$". What a bunch of idiots. SIMPLE answer: if you don't want to wait 2 month to get your money back, go to BB or radio shack!
I see Walmart is carrying the Pre as well. Do they do instant instead of mail-in?
Idiotic move if true....
There's so many people waiting to see what this phone can do and if it will truly rival the iPhone that it would be dumb to not at least a decent amount in stock at every retailer.
Personally I'm not on the iPhone because it's only touchscreen based and I really like the qwerty keyboard no my Touch Pro. So it will be awkward/hard to get good at texting on a touchscreen phone.
Plus I have a Touch already. And I love music so it would be hard to enjoy that aspect if people are calling and interrupting me while I'm listening to a song or trying to watch a movie I've bought from iTunes....
Nice glasses
The only way there will be a shortage is if Palm ships a joke amount initially in order to create a shortage, like RIM did with the Storm at first.
No way. This is just hype generating talk. How can they even face investors if they can't provide enough units. The WSJ online journal article indicated analyst expect Palm to sell 100,000 by the end of the fiscal year ending in June. I know that's June, but I doubt they'd start with 10K in early June.
When blackberry launched the 8900 for T-Mobile they only sent out 5 per store... even T-Mobile stores... it sucked. I was able to get mine through t-mobile a couple of weeks later but then T-Mobile itself even ran out of em the week after that and customers who wanted to order them through the phone were back ordered : d
Yawn
I might care about the pre when the headline says "Pre available on all carriers"
Any phone + Sprint network = That's a deal breaker ladies. When the Iphone is $199,G1 is $179, & Storm is B1G1 why would anyone leave a better network with a comparable phone? The pre needs to blow my effing mind for the same price or less(No MIRs) for me to purchase one IF it arrives on my network. That's what happens when your last to the touchscreen party.
U AT&T reps must really be scared by the Pre to be coming to Engadget every single day spouting that bullshit about Sprint's network.
Get a freaking life. Sprint's ONLY problem was the customer service and in recent months hell for the past year Sprint has DRASTICALLY IMPROVED their customer service (at least that's been my experience).
Furthermore I've had the Touch Pro from HTC for the last few months and I've nothing but excellent reception in all the areas I go to in NC.
So really quit with this bs. If there's any network I feel is shaky it's AT&T's. Especially considering all the stories I see on Engadget about how the network goes down every so often.
Bottom line is that the Pre + Sprint = Possible Winner
And that is dependent solely on the phone, how much (and how good) the marketing is for this phone from Sprint and Palm, as well as public reception.
For me it's either the Pre, the HTC Touch Pro 2, OR the iPhone (in it's next incarnation).
I am very excited to see the reviews and compare/test out all 3 phones.
Haha, the only company I would say that has a better network that Sprint is Verizon. Seriously, go to the carriers websites and look at their 3G networks. Verizon > Sprint >> AT&T >> T-Mobile. AT&T and T-Mobile's 3G networks are a joke.
Sprint is the best.
I don't work for Verizon, T-Mobile, Sprint, ATT or any Telecom co.
I guess Sprint is improving since they only lost 182,000 subscribers in Q1 compared to 1.3 million in Q4 2008. Way to go gang!! neat-o!! let's go buy some suits!!!
I've had Sprint and defected. The whole point of a cell phone is to use it anywhere, everytime I walked into a building the signal went from full bars to nada. This is on a major college campus so there isn't a lack of towers. My current carrier has worked quite well for me over the past 3 years.
They always say this. The Dash, G1, etc. were all expected to be sold out and it never did. Just to built a hype. I'm still going to hold back until some reviews are out. I'm most interested in reception and battery life
Is it just me or has anyone else noticed that the Sprint ad says June 6th but the count down says 46 days?
Woah
This has to be another joke played upon Sprint user. Yesterday after ready the Pre info here on engaget, one of the poster mention that the sprint CEO will create a fake shortage . Which will drive the hype and increase their stock.Unfortunally Mr Hess or who ever is on charge forgets that people will go but most will always wait to see what comes next,which in turn hurts their sale. Now to the poster that said that Hess will do this can you give me the poweball numbers please :-D
This is a really bad idea. First, if they are just trying to feed hype and will actually have enough phones to fill demand, then it looks like the Pre did not meet expectations and it starts to lose momentum.
However, if they really will come up short against demand, then they leave themselves open to people walking away. This isn't the Wii. Nintendo achieved mainstream success with a console that is totally unlike the other 2 main players. If there are no Wii's there is really nothing to buy in its place. On the other hand, the Pre is unproven in the real world and has a boatload of stiff competition. RIM, Apple and HTC all have good alternatives, even some on Sprint. I already think the Pre has an uphill battle being on Sprint, not because of Sprint's quality, but there numbers and past reputation. Now you throw in the idea that it may not be available, and you have people choosing other devices and networks. People don't wait around for a cell phone to come in stock.
I call BS, on two counts. First, I was at an Apple Rumor site earlier today. Saw an ad for the Pre with a 'countdown' timer (that's wrong, as many have pointed out). As I type this now, the same ad is on this page. Sure, I admit, both are places that Sprint would probably target, but, c'mon. That's pretty heavy advertising.
Second, I'm not sure what the total production is, but I'm pretty sure that Palm has been turning as many of these out as possible -- Centro be damned -- at factories in Asia since unveiling it. I think that what the Sprint CEO was talking about was a situation where 2 million people want one at launch -- the iPhone and iPhone 3G had spotty in-stocks for the first few weeks/even months. Based on Pre buzz, I think it's safe to say that they'll have problems keeping them in stock through the summer -- but this is a sign of strength, and not manufacturing bungles.
Good thing there is a walmart a block away from the sprint store i am going to and a best buy ten minutes away...
Also Cashmonee
the reason why the Wii sold so well was because they picked the right time to put it out there. Christmas time. The time where parents need to show their kids they care and want then off the hair for hours on end..LOL..GO Wii the Parental life saver...LOL
p.s Palms need to do well or their stock will take a nose dive that would kill it for good.
HYPE HYPE HYPE up the Pre, Dan.
I think the Pre looks great, but I think those who get the EP plan just to get the Pre may have buyers remorse down the line.
Who the fuck came up with this idea? Palm nor Sprint have the money to watch people with expired contracts go to ATT or T-Mobile or Verizon for their respective flagship smartphones because they can't find a Pre anywhere. They need to be selling these phones as fast as possible.
im sorry but i dont think enough people even know about the pre for demand to exceed supply. i think most pre buyers will be sprint customers anyway. no one is going to leave their carrier for a failing one.
@ Dragonfly,
actually Look_Around_You has a major bug up his ass about Apple in general, not just the iPhone.
He also seems to fall for the most obvious troll-bait every time
WTF is sleeping bag sales remark?
LOL, thats too funny. IPhone 3G kicks it to the curb, why bother.
RT
www.whos-watching.se.tc
I, for one, will not be sleeping out overnight to snatch up a Pre. Reminds me too much of the Apple hype!