Analyst Claims Palm Pre Return Rates Are High. We're Not so Sure | webOS Nation

Analyst Claims Palm Pre Return Rates Are High. We're Not so Sure

by Dieter Bohn Mon, 20 Jul 2009 10:10 pm EDT

An analyst named Kevin Dede at Jesup and Lamont has given Palm shares a "Sell" rating based on what he argues are unusually high return rates.  It comes as questions continue to swirl about build problems on the Palm Pre. We don't have any definitive answers on whether or not there are issues with the Pre, because if  you take a slightly closer look at the evidence for the return rates, the picture isn't nearly as clear as you might think.

We do just that, after the break!

The evidence appears to primarily come from two sources, one of which is a survey from our very own forums in which (as of this writing) 620 people have responded and around 40% of them have had to return their Pre at least once.   Golly, our own forums being used to advise investors, we're honored.

See, our forum members are savvy folk and they implicitly understand the thing we pointed out when we asked here on the blog whether or not you were having issues with your Pre.  That thing: our forums - God love 'em - are likely to have a higher-than-average rate of people experiencing issues with the Pre. One of a forum's main functions is solving problems, so people without problems may not head there. Our forum members understand that context and take the poll within that context.  Your average investor reading a release from an analyst firm may not.

To be fair, Dede appears to put the proper context around the numbers, writing "we have neither sufficient confidence nor statistical relevance to bend this data into an official report," but the internet being what it is, that 40% number from the report is making its way around the blogosphere. 

Dede also notes that "Impromptu questioning of managers of local retailers (Sprint, Best Buy and Radio Shack) indicated that about one in three devices is being returned."

We got in contact with Palm for their side, which they duly gave us:

We think the Palm Pre is the best product we’ve ever shipped.  While we haven’t seen anything out of the ordinary we will continue to closely monitor both Palm and Sprint customer service channels.

Despite the doom and gloom, Dede is optimistic about Palm's long-term prospects, saying they "should experience at least market growth over the longer term."

This blogger has had to exchange his Pre due to build quality issues and my gut tells me that a small percentage of Pre phones do have QA issues, but whether that percentage is actually outside the norm I'm nowhere near qualified to say (Also, I'm picky).

So does the Pre have a high return rate? Palm says nope, a survey in our forums and Dede's calls to local retailers say yep. We say anybody who makes investment decisions based on either needs to rethink their retirement strategy.

Well, one good survey deserves another, so we'll ask again here on the bloggish side of things: Have you returned or exchanged your Pre because of build quality issues? 

Via Digital Daily and Tech Trader Daily. Image from forum member bballintom22