Technology

The business and culture of our digital lives,
from the L.A. Times

« Previous Post | Technology Home | Next Post »

Verizon Wireless will sell the Pre too

May 28, 2009 | 12:44 pm

Palmpre
The Palm Pre isn't just for Sprint anymore. Credit: renaissancechambara via Flickr.

The Palm Pre, the device that was pegged to save both Palm and Sprint Nextel, will soon be available on Verizon Wireless, CEO Lowell McAdam said today. Verizon plans to market both the Pre, which will initially be available only on the Sprint Nextel network, and a new version of the BlackBerry Storm early next year. That's not great news for Sprint, which needs the Pre to keep it from losing more customers. 

"It's an incremental blow to Sprint," said Steve Clement, a senior research analyst at Pacific Crest Securities. Verizon subscribers who were thinking of switching to Sprint to try the Pre might just wait until next year, rather than jumping ship, he said.

Sprint has been struggling to reduce churn, an industry term for the subset of customers who leave one carrier for another. It lost nearly 5 million customers last year to rival carriers. 

"Sprint will have this device exclusively through at least the end of 2009," said Kathleen Dunleavy, a Sprint spokeswoman. "Beginning on June 6, customers can purchase the Pre only through Sprint. Sprint was chosen as the exclusive provider due to the power of its network, the fantastic value our offerings provide and our commitment to a great customer experience."

Sprint's most important goal with the Pre is to keep existing customers from going to other carriers such as AT&T, the exclusive carrier of the iPhone, said Ashok Kumar, an analyst at research firm Collins Stewart. This announcement won't hurt that goal, he said.

But Palm has had trouble producing enough devices to meet demand. Best Buy has already said it will probably run out of stock when it goes on sale this summer.  

"Palm thus far has been misexecuting on the production side," he said. If the device is a flop, or gets lampooned by consumers, neither Sprint nor Palm will benefit.

Sprint's stock was up 1% at $5.13 at 12:12 PDT today. Palm was up 9% at $11.49.

--Alana Semuels

Comments 

Advertisement










Video