Can the Palm Pre Compete?

The Smartphone market is an increasingly crowded place. After Apple’s success with the iPhone from 2007 onward, more companies, from GPS manufacturer Garmin to PC manufacturers like Acer and Asustek, are throwing their hats in the ring.

In January at the Consumer Electronics Show (CES), wireless industry pioneer Palm announced that they were launching a new Smartphone, called the Pre (pronounced like "tree"). Since then, we’ve heard relatively little about the Pre, beyond the occasional launch rumor, and the sporadic report suggesting both Sprint and Palm have a lot riding on the success of this device.

Still, despite a weak economy, no solid release date, little advertising, and a crowded Smartphone marketplace, it doesn’t seem like the Pre has faded from consumers’ minds. Traffic on just the informational pages on Sprint.com and Palm.com since CES suggest that a lot of people are curious about the Pre.

  • Unique visitors to Pre information pages on the manufacturer and/or carrier site(s) alone have been hovering around the 100,000 mark for the last seven weeks.
  • Interest in the device around CES (week of January 4th) was high: nearly 400,000 people checked out one or both of these pages.
  • A median of about 1.6x more visitors have visited Palm’s site over Sprint’s so far for information about the device. This may be in part because the Pre information pages on Palm’s site are more robust at the moment, including pictures of the Pre’s functions, as well as video.

This traffic is all despite the fact that neither Palm nor Sprint has consistently featured the Pre in a prominent way on their site since the announcement. For example, as of Tuesday afternoon, although there was a front page link on the Palm site, it was far below a feature for the Treo Pro, which launched this week, and the Pre was not mentioned on the Sprint.com homepage.

To gauge consumer interest in the Pre relative to other Smartphones, the original iPhone is perhaps the best example. Like the Pre, the iPhone was announced well before it was launched. When we look at interest in the original iPhone on Apple.com and AT&T’s website around the same time in 2007, we see different numbers, but a very similar pattern.

A few similarities between the two charts stand out.

First, in the case of the iPhone, the majority of the traffic throughout the period shown was also going to the manufacturer, Apple.com. In fact , AT&T didn’t have information about the iPhone on their site in the first week shown on the chart.

Second, although the numbers were higher for the iPhone than the Pre, the Pre’s numbers are fairly strong in comparison, especially when you factor in how much buzz surrounded Apple’s first foray into a Smartphone market that was much less crowded in early 2007. Online interest the week that the iPhone was announced resulted in 600,000 visitors to the information on Apple.com, about 50% more than the aggregate traffic we saw to the Pre on Sprint.com and Palm.com.

Although we don’t know yet how strong Pre sales will be, and eclipsing the phenomenal popularity of the iPhone would be a difficult task at best, it looks like the Pre may be positioned to have a fighting chance in a very challenging marketplace.