Lawrence Harris, an analyst at CL King, has claimed that Palm Pre sales are slowing and that Palm will likely be cash-flow negative for the current quarter and next, and a negative 44 cents per share for the year.
“Our channel checks suggest sales of the Pre have indeed slowed. Store traffic at Sprint stores has declined since mid-June. The Pre, which initially was not available for online purchase from Sprint’s website, became available last week. We believe a majority of the Pre sales have been made either to existing Palm users or Sprint subscribers. It also appears not to have been as successful as the iPhone in terms of winning subscribers from other carriers.”
Palm had decent backlog at the end of the May Q4, Harris observes, though he points out that backlog has not been a good indicator of sales for Palm, historically. “Backlog grew by 53% in FY07 and by 29% in FY08,” he writes, “but the company’s sales declined by 1% in FY08 and by 44% in FY09.”
