Palm Investor Banking on First-Gen iPhone Fallout
By Simon Sage on Friday, March 6th, 2009 at 2:00 PM PST In Palm, Palm Pre, iPhone
Elevation Partners co-founder Roger McNamee is especially excited about Palm (NSDQ: PALM)’s launch window, and think a lot of iPhone users will make the jump to the new Pre.
“You know the beautiful thing: June 29, 2009, is the two-year anniversary of the first shipment of the iPhone,” McNamee said today in an interview in San Francisco. “Not one of those people will still be using an iPhone a month later. … Think about it — If you bought the first iPhone, you bought it because you wanted the coolest product on the market. Your two-year contract has just expired. Look around. Tell me what they’re going to buy.”
Nevermind the ones who swallowed the ETF and picked up the next gen iPhone at launch, will the floodgates really open as soon as those early adopters’ contracts or up, or are they more likely to ugprade to the iPhone 3G? While I’m tempted to side with the Pre, folks who have their iPhones love them, and would probably be wary of switching to something where they wouldn’t be able to keep using all of those apps they’ve bought through iTunes. We’re also assuming Apple (NSDQ: AAPL) doesn’t make another announcement before the summer rolls around, which, although possible doesn’t seem entirely likely. What do you guys think: will expiring iPhone contracts be the lynchpin for the Pre’s success?
[via Bloomberg]
To say that “not one of those people will still be using an iPhone a month later” is such a clear overstatement that it gives me cause to wonder whether McNamee has been drinking his kool-aid too early in the morning or if he is intentionally trying to generate quotes for the sake of publicity.
Certainly some early iPhone adopters will adopt the Pre very early on, but my expectation is that initial Pre sales will come from customers who are (a) already Sprint customers and (b) have been intentionally waiting to see what technology “comes next.” If it lives up to expectations, it will woo iPhone owners later on, and ONLY if the Pre turns out to be superior to the iPhone.
McNamee hasn’t taken into account the insanely high customers satisfaction scores of the iPhone (http://apple20.blogs.fortune.cnn.com/2008/04/01/iphone-scores-79-in-customer-satisfaction-survey-rim-trails-at-54/). Why would consumers abandon a phone they are perfectly happy with just to be an early adopter of the last “Hail Mary” of a dying company?