Palm seeing 40% Palm Pre return rate?

Monday, July 20, 2009 23:20

palm pre loose battery random shutdown fix 300x225 Palm seeing 40% Palm Pre return rate? The Palm (NSDQ: PALM) Pre is a hot new piece of kit. Palm baked all sorts of multi-touch, GPS, WiFi, eye-catching goodness into the WebOS-powered Palm Pre, and it should be given praise for what it does well. But, all that hotness apparently comes at the cost of manufacturing quality. According to Jesup & Lamont analyst Kevin Dede’s estimates, Palm is seeing Palm Pre return rates hitting around the 40% mark – nearly half of all Palm Pre’s sold are being returned by less-than-impressed customers. At issue here is the rate of hardware defects that have plagued the Palm Pre fleet in the US.

Reports of higher-than-normal return rates follow on previous estimates that had Palm selling some 300,000 Palm Pres in the month of June. If true, Dede’s estimates could really hurt Palm’s return to smartphone success. It doesn’t help that a survey recently found that many Palm Pre users wished the WebOS-powered smartphone had some sort of on-screen virtual keyboard to complement the physical QWERTY keyboard – for quick text input tasks and the like.

The anecdotal evidence from forum members and Sprint (NYSE: S) store managers isn’t enough for Dede to publish an official report on the matter, but he’s still giving Palm a “sell” rating. Dede says Palm stock is worth about .50.

The WebOS is more important to Palm than the Palm Pre’s success, in the long run. But, that doesn’t mean that Palm doesn’t care how many Palm Pre’s it can push on to market. The Pre is still first-generation hardware, and with that in mind, it’s a great smartphone. Next-generation WebOS smartphones should prove even more impressive. Palm, what’s up with your WebOS licensing deals?

[Via: Barrons]

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