Maybe The Palm Pre Isn't Selling So Well, After All

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My, how time flies in the tech world. It was only one month ago today that the Palm Pre launched to the public, giving users their first chance to try out WebOS first hand. Critical response to the device was generally positive, though much of this stemmed from the phone’s impressive operating system rather than the hardware itself. Still, it was exciting to see a genuinely compelling product come out of Palm for the first time in years, and many of us viewed it as one of the first worthwhile competitors to the iPhone. And then the iPhone 3GS came out, selling 1 million devices in a single weekend.

Since then, the Pre has largely fallen under Apple’s shadow. But there have been murmurs that Palm has still managed to sell far more devices than most analysts were expecting — a recent report from Charter Equity Research analyst Ed Snyder suggests that Palm is still unable to meet demand, and that the company will ship one million phones to Sprint during the device’s first quarter in production. Today we’ve gotten a report that indicates that this may be pretty far from reality.

The report, which comes from JNK wireless consultant iGR, was conducted on July 3, during which the firm’s analysts gathered reponses from fifty Sprint stores (more than 50 were contacted, but some refused to participate). The results? Palm isn’t having any trouble keeping pace with demand.

None of the stores contacted had sold out of Pre and the majority had ‘plenty’ available. This compares with 8 percent of the stores contacted last week saying they had sold out of the Pre (down from 28 percent in Week 2 and 38 percent in Week 1). iGR’s channel checks clearly show that Sprint is meeting the current demand for the device with the inventories available in the stores.

The report also notes that stores are reporting a dropoff in the number of Pres being sold, with 40% of stores willing to discuss their volume sales reporting fewer than 10 sales this week. 33% of stores reported sales of 10-20 units, with 16% reporting 20-30. That’s per week. I’d be surprised if most Apple stores are seeing similar sales in a matter of hours.

Still, there are some bright points for Sprint and Palm. According to the report, a quarter of the stores contacted say that most Pres are being sold to new Sprint customers, which means the device is appealing enough to attract users away from their old carriers.

Obviously, these polls shouldn’t be viewed in terms of absolute figures — we don’t know exactly how many phones Palm has sold, and neither do the aforementioned analysts. But it sounds like Palm still has its work cut out for it to drive interest beyond its initial launch hype. What Palm badly needs at this point is a robust App Store, which has become one of the iPhone’s biggest selling points. Unfortunately, that’s a long ways off — Palm still hasn’t broadly released the webOS SDK to developers, which means users only have a small pool of around 30 applications to choose from, and that isn’t going to change any time soon.

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