14 DAY TRIAL // According to a recent report coming from an analyst at Wachovia Securities Inc., the market performance of the newly launched Palm Pre high-end mobile phone is weaker than previous forecasts showed. Jennifer Fritzsche said in the report that the device seemed to attract only users that were already Sprint's customers, and that it didn't help the carrier lure users from other operators, as it had been originally expected.
As many of you might already know, the Palm Pre went on sale in the US exclusively through the wireless carrier Sprint, and was touted as being a real competitor against Apple's iPhone, a device that leads the US mobile phone market at the moment. Even so, it seems that the new Palm Pre is not able to attract customers away neither from AT&T, which is selling the iPhone exclusively in the country, nor from Verizon Wireless, a larger competitor.
Both Sunnyvale, California-based Palm and Sprint, based in Overland Park, Kansas, need the Pre to become successful and to help them regain some of the market share they have been losing over the past few years, yet it seems that things are moving in the opposite direction. Although the Pre broke Sprint's sales records at launch, the new reports show that its performance is rather poor, and the shares of the two companies are reported to have dropped as a result.
Sprint has lately lost more than four million customers to rival carriers, while Palm, which gained more than a decade ago the reputation of being a pioneer in handheld devices, was almost on the verge of disappearance about half a year ago, before announcing the Pre. As resulting from the new reports, Sprint's shares went down 33 cents, or 6.1 percent, to $5.11 in New York Stock Exchange composite trading, which is the largest drop it sees since May 13. At the same time, Palm dropped 68 cents, or 4.7 percent, to $13.67 on the Nasdaq Stock Market.
While attracting only Sprint customers on its side, Palm's Pre device also faces increased competition from Apple's iPhone, as the latest model in the line, iPhone 3G S, goes on sale today with AT&T. Moreover, a new version of the handset's software has been released into the wild recently, the iPhone OS 3.0, and it seems that it brings along a wide range of improvement that the owners of older iPhone versions will also benefit from.