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Analyst: Palm sold about 50,000 Pres

June 8, 2009: 11:27 AM ET

Sprint store 2How did Palm's (PALM) Pre do in its first weekend of sales?

In a report to clients issued Monday morning, RBC Capital's Mike Abramsky offers some numbers.

Based on his "channel checks" -- presumably a survey of Sprint (S) and Best Buy (BBY) retail stores -- Abramsky estimates that Palm sold somewhere between 45,000 and 55,000 Pres last weekend ,and put another 10,000 to 15,000 would-be customers on waiting lists.

Two weeks after launchApple (AAPL) and AT&T (T), by contrast, sold 270,000 iPhones in that device's first two days of sale (Friday and Saturday, June 29 and 30, 2007).

A year later Apple sold 1 million iPhone 3Gs in less than three days -- although analysts estimate that more than half of those sales were in overseas markets.

Palm's sales were limited to U.S. retail outlets and were severely constrained by short supplies. Store representatives told Abramsky that their initial inventories ranged from 5 units to 80+ (average: 25-45 per store), which sold out within the first one to three hours.

The reps were not at all certain when more supplies would be coming in, although most expected to get them "sometime next week."

Among Abramsky's other findings:

  • An estimated 80-90% of early Pre buyers were Sprint customers, some upgrading from flip phones, others from HTC smartphones or Research in Motion (RIMM) BlackBerries
  • An estimated 60% had previously owned Palm devices
  • The features that attracted customers to the Pre included "its sleek [user interface], Web browser, physical keyboard, multitasking, and side-loading with iTunes"
  • Battery life and limited apps (shortcomings highlighted in early Pre reviews) did not seem to deter early buyers.

Abramsky believes Palm is on track to sell 470,000 Pres in its first quarter and 2.6 million units in its first year.

"Forward catalysts for [share] growth and valuation," he writes in analyst's telegraphese, "include distribution expansion, additional product launches, visibility to breakeven, and smartphone market growth...

"Valuation could be near-term volatile on: a) competitive launches from Apple, RIM, Android; b) possible litigation concerns; c) launch or subsequent execution issues (e.g. shortages, quality, support, etc); d) speculation over future carrier launches."

Abramsky is sticking with his "outperform" rating for Palm and a $14 price target. Shares closed Friday at an even $13.

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Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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