Palm to Manipulate Supply to Create Buzz [Archive]

Vincent Ferrari

05-05-2009, 09:00 PM

<div class='os_post_top_link'><a href='http://www.bloomberg.com/apps/news?pid=newsarchive&sid=az5nzqH0Mt4M' target='_blank'>http://www.bloomberg.com/apps/news?...id=az5nzqH0Mt4M</a> </div>" Palm Inc. may stockpile fewer than 400,000 Pre models when the touch-screen device goes on sale this year, making the phone scarce to enhance its allure to consumers, analysts said. The Pre will debut with about 375,000 units in stock, according to the median estimate of six analysts surveyed by Bloomberg. Apple Inc. sold 1 million iPhones in the three days after the debut of a faster 3G model last July. Half of Apple’s stores in the U.S. had sold out by that time. A sellout may help the Pre generate the buzz needed to win customers away from the iPhone. Palm is counting on the Pre, which has a wireless charger and software that lets users shuffle through applications like a deck of cards, to revive its reputation as a phone pioneer, as well as profit."<img height="270" src="http://images.thoughtsmedia.com/resizer/thumbs/size/600/at/auto/1241490106.usr18053.jpg" style="border: 1px solid #d2d2bb;" width="419" />Apple CEO Steve Jobs has been called manipulative by many people to the point where he's become a caricature of himself in the eyes of his critics, but the one thing he didn't do with the iPhone (at least that we know about) was aritificially restrict the supply to keep the demand high.  iPhones were huge on release dates (for both models) and despite shortages in the short term, were back in stock as quickly as they could be.  You may not have been able to get one on day one, but within the first week, most early adopters were satisfied.My point is that if people want your product, you don't have to manufacture buzz.  To me, this stinks of Palm realizing they won't have the iPhone-like circus on launch day outside Sprint stores and they're trying to make sure that the demand for it goes beyond those who line up on the first weekend.Could it work?  You never know, but I have a feeling people will see through it when there are no lines, no circus, and no phones are there to be had anyway.  That's a risk Palm really shouldn't be taking, in my opinion.

ptyork

05-05-2009, 09:35 PM

Somehow you turned speculation on an analysts interpretation of figures into fact here, Vincent. It is possible that they are trying to generate buzz, yes. It's worked very well for Nintendo. However, I think it more likely that a) they are having a hard time getting the credit necessary to bulk up supplies beyond 400K units at launch (even at that number they are having to front ~$80 million), b) they realize that Sprint only has a limited number of folks willing to pony up for a $200-$300 handset in this economy, c) it doesn't have the Apple cachet to draw defections, d) they are unable to obtain more from their suppliers in a timely fashion, and/or e) they are having to hold back a little since this is only the first of a few WebOS devices to be released in the next six months.