Palm seeing 40% Palm Pre return rate?

The Palm Pre is a hot new piece of kit. Palm baked all sorts of multi-touch, GPS, WiFi, eye-catching goodness into the WebOS-powered Palm Pre, and it should be given praise for what it does well. But, all that hotness apparently comes at the cost of manufacturing quality. According to Jesup & Lamont analyst Kevin Dede’s estimates, Palm is seeing Palm Pre return rates hitting around the 40% mark – nearly half of all Palm Pre’s sold are being returned by less-than-impressed customers. At issue here is the rate of hardware defects that have plagued the Palm Pre fleet in the US.

Reports of higher-than-normal return rates follow on previous estimates that had Palm selling some 300,000 Palm Pres in the month of June. If true, Dede’s estimates could really hurt Palm’s return to smartphone success. It doesn’t help that a survey recently found that many Palm Pre users wished the WebOS-powered smartphone had some sort of on-screen virtual keyboard to complement the physical QWERTY keyboard – for quick text input tasks and the like.

The anecdotal evidence from forum members and Sprint store managers isn’t enough for Dede to publish an official report on the matter, but he’s still giving Palm a “sell” rating. Dede says Palm stock is worth about $12.50.

The WebOS is more important to Palm than the Palm Pre’s success, in the long run. But, that doesn’t mean that Palm doesn’t care how many Palm Pre’s it can push on to market. The Pre is still first-generation hardware, and with that in mind, it’s a great smartphone. Next-generation WebOS smartphones should prove even more impressive. Palm, what’s up with your WebOS licensing deals?

[Update]
Palm has contacted us with the following statement:

“The current return rate for Palm Pre is in-line with the standard industry return rates for smartphones.”

Apparently, the information from Dede “isn’t accurate.”

[Via: Barrons]

About The Author

Will Park

Will hails from The City of Angels - Los Angeles, California. He spends his time playing with his numerous gadgets and looking forward to seeing what future holds for mobile technology. An avid promoter of a fully "digital" life, he promotes the widespread adoption of truly mobile, paper-less living. He dreams of the day when he can go completely digital. No more snail mail, paper receipts, bound books, notepads/spiral notebooks, credit cards, hard currency. He's a digital warrior - fighting for the converged life. He is an idealist and a realist - he has a perfect view of what the world should be but knows that the world is not perfect. Can we ever hope to see Will's dream become reality? We'll see...

Marvelouss

You love posting “unscientific” surveys. How about actually conducting a scientific sampling of at least 100 of the 4,100 Sprint stores? Oh. That’s right. You don’t write or work for that matter. You just read garbage on the web and post a link to your site for traffic. LOSER!
jerry

I returned mine. Hardware was fine. Palm Pre was slow and it needed a keyboard. A Virtual keyboard would have been okay.
Marvelouss

Virtual keyboard will arrive late summer.
ncage

I disagree with the virtual keyboard thing. With everyone bitchn about the keyboard on the Pre it was fine. I did return mine? Why….they had MAJOR reception problems. I have friends who have sprint and have no problems but my reception was all over the place with the pre. I coudl be standing in one spot and id go from 3-4 bard EVDO to 1x to drop. I got so fed up with it. The call quality because of this was crap too. I wasn’t going to sit around and wait for palm to fix the issues. I really wanted to keep the pre especially considering the $99 everythign plan is an awesome deal but i wasn’t going to deal with an unusuable phone…i do have to give it to palm though the OS was awesome.
testure

Well I’m not surprised that people are returning the Pre. Keep in mind, most people (new smartphone adopters) have snail-like learning curves and little patience. Expecting the Pre to be an Iphone replacement will lead to disappointment.
truthsayer

This is laughable. First, if there were this many returns you would be seeing tons of Blogs all over the internet posted by dissatisfied customers telling you why they hated the Pre and why they returned them. Second, one of the things I do is track returns of handsets for Sprint. I can tell you first hand the return rate is nowhere close to 40%! In fact it’s less than others and about average for the industry. So not sure how anyone would have come up with this info but clearly they haven’t a clue and were just trying to grab some headlines, which unfortunately they did.
Dan

Sounds like over exaggerated nonsense to me, how can this so called “analyst” attribute returns (whatever the percentage rate) to hardware? Sprint are the US’ third network and don’t rank favourably in terms of reception.
truthsayer

Hey guy, get your facts straight about reception. Sprint has been ranked #1 twice now this year in published independant surveys in terms of reliability (dropped calls) and has been ranked #1 in the Southwest and West according to Consumer Reports during their last two surveys. Coverage and reliability are not going to drive returns at Sprint.
John

I returned mine and my brand new phone (number 3) doesn’t work right out of the box…when I dial out the screen goes black and I have to reset the phone…same story with the only 2 other people I know with palm pres…I mean they have only been out for what??6 months??