Lines Form To Be The First To Own A Palm Pre; Retailers Report Shortages


imageHours after the Palm (NSDQ: PALM) Pre went on sale this morning, retailers started reporting shortages of the devices and were adding customers to a waiting list.

Bloomberg reports that Sprint



I don't plan to buy this phone, and yes, I am an iPhone fan, but I'm really happy that it'll give Apple a run for its money… more competition means Apple will have to work harder at improving the next iPhone. And MS gets pushed further into irrelevancy in the mobile space. Seriously, they must be panicking in Redmond.

Inventory Launcher

The first-buyers of the Pre, especially customers with iPhones, could be unlocking the device and using on Verizon. The iPhone unlockers have become Pre first-buyers. With the Pre inventory shortage, Sprint missed its mission. Sprint’s mission is managing churn. The Pre inventory level had to meet two criteria. Firstly and most importantly, there had to be enough stock to offer the Pre to every existing Sprint customer that was replacing their phone or had a contract expiring. Secondly, at Best Buy and Radio Shack, the Pre inventory level had to be sufficient to offer the Pre to customers of any carrier replacing a phone or evaluating their contract. The worst scenario is for store staff to say that “We’re out of the Pre, but let me show you other smartphones”. The Pre hype fed both phone bait-n-switching and carrier switching. Sprint should have estimated the replacement and renewal prospects in Sprint, Best Buy and Radio Shack stores during the next 30 days. Then the inventory formula is: Inventory Launch = 30-day Selling Opportunity. Sprint’s claim to build Pre demand detracts from the churn mission. The five “flop” factors for the Pre have been previously described in the June 3rd Sprint ignored the risk management of flop probability.

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