Palm to Sell 1.5 Million Pres, Says Analyst

According to the latest news on the Web, Palm will be able to sell no less than 1.5 million units of its newly unveiled Pre handset. Besides this forecast, we should also note that Palm's stock price took a jump right after the company unveiled its long-awaited, next-generation software and hardware.

“Our estimates move significantly higher on the strength of the Pre; however, we still forecast operating and net income losses for the next few fiscal years. Although we are very optimistic on unit volumes, we are taking a fairly conservative view on ASPs and margins. While reaction was overwhelmingly positive (and rightfully so in our view), very little was asked or offered on Palm’s pricing strategy for the Pre,” said Citi analyst Jim Suva.

The new phone launched by Palm is expected to offer the company a way of regaining some of the ground it lost lately. According to Jim Suva, “We think Palm will soon have to offer details on expected ASP for the Pre and will likely revisit our estimates in the future. That said, even with a fairly conservative ASP and margin expectation, our forecasted operating losses narrow dramatically and we would expect that trend to be echoed in consensus estimate.”

The estimation is reported to be made considering only a U.S. launch of Pre. Yet, we should notice that a UMTS version of the device is also in development. Nevertheless, the handset will be exclusively launched on Sprint, although the two companies did not announce how long the exclusivity would last. This may mean that the UMTS version of the Pre should be seen as early as August. For what it’s worth, 1.5 million Pres sold in Sprint's network sounds like great news for the carrier.

One issue the device might experience is connected to its price, which was initially expected to be of around $200, yet reported afterwards to be much higher. We should see the handset on shelves in the May-June time frame.