Sprint has Pre Exclusive thru 2009 36
Reuters is reporting that Sprint Nextel has the exclusive U.S. rights to sell the Palm Pre through the end of 2009. Their source is “a person familiar with the matter,” so you can take it with a grain of salt. This person, who asked not to be named, did not offer any insight beyond this year.
SeekingAlpha has posted a story (Why Sprint Needs the Palm Pre to Succeed) that has some more meat.
“It is clear that Sprint needs something to make customers stick around, and they believe that they have that silver bullet with their exclusive deal with Palm (PALM) to provide the new Pre handset.”
...One 'must-have' handset can be a huge boon to a carrier, and with Sprint’s high churn rate it needs to give consumers something to get excited about."
For sure, Sprint needs all the good news it can get. More on Sprint's earnings can be found here.
36 Comments
Good news for Sprint, bad news for Palm (as far as stock price)
There is only one hangup I see and that's with simultaneous voice and data, and it's a pretty easy software/policy fix. The question is, after 2009 does Sprint want to keep their customers or let them go to a carrier that allows that kind of functionality.
I dont think that's a big enough reason for people wanting to leave. If they are happy and it costs cheaper on Sprint (data plan) most people will not switch.
Plus most of those people will be in two year contracts, so they can't jump ship right away anyway. And by that time there will be new models out. Will Sprint carry them first? They were the first to have my Treo 650 at least, I don't know about later models.
Simultaneous voice and data is not possible on EVDO; it's not a software or policy issue.
I thought Rev. A allows it. (Too lazy to check Wikipedia right now).
Are all these "people familiar with the matter" the same people who were so sure the Pre was launching on Sprint on Feb 15?
Nope! Those were CSRs, who are usually not familiar with anything. :-)
I am really surprised to see that Palm will risk its own solvency on the success of Sprint's ability to turn the Pre into a winner.
Even if AT&T is able to produce a GSM Pre on January 1st, that is still three quarters away. Can Palm protect its intellectual property advantage for that length of time before competitors come with their own Pre-like products.
I hope they know what they're doing.
My advice, wait to the third quarter before you get this. By that time, Sprint will really be discounting to try and generate some market for this device.
I hope Palm allows Sprint to keep exclusivity for the Pre at least an year or more. Apple did this with the iPhone and look how AT&T benefited with this. The Pre will do the same for Sprint. Without a doubt the Pre will be a success. There's nothing in the near future to compete with it (with the exception of the next generation iPhone and unless Apple brings out an iPhone that is "wow" it won't be in competition to the Pre). The providers that might lose subscribers will be Verizon and T-Mobile (hopefully, AT&T too). AT&T will soon lose the exclusivity to the iPhone and when that happens, I can assure people will be leaving.
I'm no Sprint fanboy, but 6 months is kind of weak sauce. I'm excited to see what Sprint does with the Pre. There really isn't much to do about Sprint's coverage issues, but AT&T had similar coverage concerns when it took on the iPhone.
Give the Pre to Verizon, and you've suddenly got concerns from the provider about how custom apps (a HUGE part of Palm's future) are going to affect VZ Nav & V Cast. Palm waiting to sell the Pre until after its become a sensation is smart.
A little conversation about it here http://palmprefix.com/2009/02/20/sprint-guaranteed-palm-pre-exclusivity-...
The Pre is not the type of phone you wait on.
And like the iPhone was?
If this is true Palm is really risking it. When (if) the third iPhone iteration comes out in June people still debating whether to wait for the Pre to show up on AT&T are less likely to wait for six months.
This makes me think that the middle of the year release date predictions are probably more accurate; because that would mean a 6 month exclusivity on the Pre would take us through the end of 2009.
Just to refute what you said:
It could mean a March release and a 9 month exclusivity window.
It could mean a September release and a 3 month exclusivity window.
Also, no one said when the exclusivity period ends in 2010, only that in continues through the end of 2009.
True, but the general thinking or rumor-milling (pretty sure I just made that up) has been that Sprint was getting a 6 month exclusivity on the Pre.
Unless there's some serious cause for delay, it can't be September. Palm has said "first half of the year" too often for that.
And phones are never delayed.
Of course phones get delayed. There hasn't been any word about the Pre being delayed, though. Everything Palm has said is that it's on schedule. They just haven't disclosed what their schedule is.
Anytime I see, "unnamed, anonymous, or expert" in an article. I do not give it any weight. I do not see the logic in releasing the Pre to another carrier, that would completely defeat the purpose of the Pre on Sprint. All company "B" would have to do is offer a better subsidized price which will offset Sprints ETF.
The "logic in releasing the Pre to another carrier" is to make it available to more consumers. It's what they've done with every phone they've ever built. I don't understand why the iPhone--the first phone ever offered by a computer company--and their exclusive deal with AT&T is now considered the reference for how this stuff is supposed to work.
I am not looking through rose colored glasses, I am being an idealistic. Sprint needs this device and Palm needs Sprints network. Sure if Sprint was doing great, then I can imagine the Pre going to other US carriers, in the real world Sprint would seriously lose the opportunity to gain customers from ATT, Verizon or Tmo, depending which carrier allegedly gets a version of the Pre. The iphone lured customers away from Sprint, as did the Storm and G1. Analyst have predicted 1.5 million Pre sales (on Sprint) within the first 12 months. That will NOT be possible if Sprint only has a six month exclusivity.
Analyst Forecasts: http://blog.wired.com/gadgets/2009/01/analyst-forecas.html
Palm will wait and see how the Pre sells with Sprint. If the sales number are not so good, they will bring it other providers. If the numbers are good, I can assure they will do as Apple did and stick with Sprint. Maybe till the end of 2010.
But arent' these types of deals put in place *before* the phones begin to sell? I suppose they could have a "wait and see" clause, but I don't know. I thought the Apple/AT&T deal was firmed up before the release of the iPhone.
Yes the deals between Apple and AT&T were made prior to the release of the iPhone, but when the contract was almost over Apple decided to stay with AT&T because the sales were good. This can definitely happen to the Palm and Sprint with Pre.
In the business world (or at least the one I operate in), I need to provide my users with a phone they can take to Europe and Asia.
There is even parts of Canada where CDMA phones are useless.
If they hope to make inroads, they need a business class device and CDMA is not it.
CDMA might not be the global choice. It should be though, but that's another story. However, you basing the whole idea of a business "device", as you put it, has to be anything other than CDMA is an absurd statement. As far as the US, CDMA will do just fine. And unlike you, many Americans don't take trips often to Europe and/or Asia and I suspect your trips might slow down as well with the economic downturn. Lastly, when the iPhone came out, even though it was GSM was not able to work everywhere. Remember there's different digital tech, but there's also different frequencies that countries use. Oh, by the way, two of the biggest markets in Asia, uses CDMA as their major digital choice.
It is not absurd. It forces larger organizations like mine (who buy phones in the dozens to hundreds) to look elsewhere.
We're not talking about smart phones for individuals - we're talking enterprise devices and that is where the money for Sprint and Palm lie.
As for CDMA overseas - show me where Sprint roams. Case closed.
India. I went to India last August for work and the CDMA coverage in that country is phenomenal. There's plenty of GSM coverage there too, but the hilarious part is my TMobile and AT&T wielding coworkers had more expensive roaming than me. ($3/minute as opposed to $2.50/minute with sprint) Take that silly GSM. :)
Although my scenario is an exception, if your travels do NOT include Europe then you'd be surprised at how much CDMA is out there. My company has offices in India, Singapore and Australia. For us, CDMA is a viable option.
It is absurd to think you would need GSM on a cell phone to be successful in any business that you or your company is in here in the US. Only 1 out of a 500 of these so-called business people go overseas. You make it sound like everyone in these large corporations go overseas. Furthermore, Sprint and Verizon both use CDMA and agood part of their customers are large corporations. Unlike you world traveler, my traveling days are over. However, in my experience, it's cheaper to rent a phone once you get your location anyway and just use your smart phone for reference. By the way, I didn't know about India, but China and Korea all use CDMA. In Korea, they only use CDMA and they are the world's 8th largest economy. As you said, CASE CLOSED.
Regardless of the exclusivity period, the longer Palm waits, the less people care. MWC took a big bite out of the Pre hype. It seems like both Palm and Sprint are going to lose on this one.
Who? are you a moron? "The longer Palm waits, the less people care"? Do you have any notion of the idea of hype? You know that little thing that generates massive interest and sales? Like the very reason there are more and more news stories and websites on the Pre everyday just like this one? Palm is not waiting. They announced the phone in January just over a month ago. Barely any time has passed and since Palm actually knows what they are doing they don't want to release a phone full of bugs ala other familiar companies in the industry. Anyone expecting the release of the Palm Pre before March/April is insane. Grow up and acquire some patience and knowledge of how cell phone releases work, as well as common marketing sense.
"MWC took a big bite out of the Pre hype." Is that why everyone actually in attendance at the event had nothing but more positive things to say about the Pre? Is that why they were all even more impressed with the functional Pre than at the closely controlled CES demos? MWC increased the Pre hype exponentially just like any media exposure event for this device would.
"Both Palm and Sprint are going to lose on this one?" Are you SERIOUS?! The Palm Pre is going to save both companies and their stocks have already been on the rise. Palm's stock is soaring and the phone doesn't even have a release date yet.
I guess there really never is a shortage of ignorant forum trolls though. At least real gadget geeks do their research first :)
I want to add something, let's say this so-called "anonymous" source is correct, there is no indication another US carrier will be getting the Pre after Sprints exclusive deal allegedly expires at the end of 2009. Sprint and Palm can easily renew the exclusive deal for another 3, 6 months, or years. An exclusive deal ending does not mean another carrier will be getting the same device. I still do not believe Verizon will be getting a CDMA version of the Pre, at any time in the future. Mainly due to, Verizons history of crippling devices, e.g. I cannot see Verizon allowing the Amazon music store, or enabling the GPS chip for anything other than VZ Navigator. Palms CEO said, one of the reason Palm chose Sprint, is that Palm wanted a carrier that will allow the user to have access to all the features of the Pre.
Colligan also said that they plan to get the Pre on other US carriers in 2010. That says to me that while Sprint might want to extend their exclusive, that Palm will say no--Palm will want to get it on other carriers sooner, not later. While studies may show that a majority of Palm's current users are on Sprint, Palm has always targeted as many carriers as they could.
Lots of people are saying now that "each of the carriers has its flagship phone"--it's not going to stay that way. Something's going to shift. The only "long-term exclusive" at work here is AT&T's for the iPhone. Yes, lots of other phones are being offered to try to compete with the iPhone--they're competing on hardware, though, not carrier-mfr. deals.
From the specs and news coming out since CES, it appears that Palm has already crippled much of the Pre's potential already. I'm sure Verizon wouldn't need to alter it much to be happy.