Analyst Finds Palm Pre Sales Stabilize At Ho-Hum Levels

Despite the early fanfare and limited inventory at launch, Sprint doesn’t seem to be hitting it out of the park with the new Palm Pre. Earlier this month we reported on some channel checks by JNK Securities analyst Mike Ehrlich, who called 50 Sprint stores and found out that sales were lackluster. Yesterday, he issued a new report based on channel checks from last Thursday and Friday, Week 5 after the Pre’s launch. Of the stores willing to discuss sales volumes, here is the breakdown of demand on a per-store basis:

    Week 5 Palm Pre Sales Per Sprint Store

  • 10 units or less: 30% (vs. 40% the prior week)
  • 10 to 20 units: 45% (vs. 33% the prior week)
  • 20 to 30 units: 18% (vs. 16% the prior week)
  • 30 to 50 units: 12% (no comparable)

The sales seem to be stabilizing, with 45 percent of stores reporting 10 to 20 units sold last week, up from 33 percent the week before. Stores reporting 20 to 30 units sold, and 30 to 50 units, also increased. The only sold-out situations appeared at three stores expecting new shipments. Ehrlich writes:

It has been clear for the last few weeks that Sprint is now meeting the current demand and that the ‘sold out’ scenarios common just after launch have ended – if they do occur (as they did this week), they are a temporary scenario while the store waits that day for a new shipment. Finding a Palm Pre at a Sprint store should not be difficult at the current time. Sales also seem to have stabilized

The Palm Pre is easily the best phone that Sprint offers, so at the very least it should be a boon for getting existing customers to upgrade and sign new contracts. But the true test of whether or not the Palm Pre is a success will be the extent to which it can attract new customers to come to Sprint from other carriers. Based on Ehrlich’s surveys, that doesn’t seem to be happening much. Only 7 percent of the stores surveyed reported that a majority of Palm Pre sales were coming from new customers to Sprint, with about 30 percent saying that the majority is coming from upgrades from existing Sprint customers, and two thirds saying it is a mix.

Sprint has about 1,000 stores, so surveying 50 random ones may or may not be indicative of what is going on throughout the network. So treat this as a data point, until Sprint or Palm choose to disclose actual sales figures. But if this distribution of sales holds across all of Sprint’s stores, it would amount to between 20,000 to 30,000 units sold each week, well below the 50,000 to 60,000 weekly sales estimated at the end of June.