Much Ado About Sell-Through
It started with a report from Town Hall Research analyst David Eller, which took issue with Palm's definition of "sell-through". Rather than counting the number of smartphones sold to end-users, Palm instead counts how many have been bought by their carrier partners - a number which also includes those devices that are sitting in retail inventory channels, waiting to be snapped up (or not) by customers. Eller's "research" (and do note the scare quotes) indicates that there are eleven weeks' worth of inventory currently in the channel.
From there, the story was picked up by John Paczkowski at Digital Daily, who was content to simply note that Palm might have an inventory glut. Gizmodo ratcheted things up a notch when it ran with the question: "Is the Palm Pre Tanking?" And then the notoriously dour-on-Palm CrunchGear went a sensationalistic step further, conflating Palm's decision to abandon Windows Mobile development with the Pre's assumed "faltering" and declaring that reliable old cliche` that's been going round the traps for years: the End Of Palm is nigh. (They deservedly copped a beating in the comments from Palm fans.)
What to make of all this? Frankly, your correspondent finds it a little overblown. Inventory dumping is something that Palm has been accused of in the past, usually accompanied by dire predictions of the company's Imminent Doom. It hasn't happened yet, and with the Pre set to launch internationally in a few short weeks, more webOS devices in the pipeline and a cashed-up sugar daddy in the form of Elevation Partners it seems unlikely to happen in the near future either.
So my view: take a chill pill, folks. The Pre ain't the iPhone when it comes to sales figures - that much is obvious - but Palm are doing about as well as can be expected. In fact, for a company of their size I'd go so far as to say they're punching above their weight with such a strong foundation as webOS. Financial stories have a tendency to make my brain explode, but you'd have to be insane not to recognize that Palm have a great product that has captured a significant amount of mindshare. So long as you have those fundamentals in place, success is almost guaranteed - even if it isn't world-beating. Barring a massive screw-up, Palm are going to keep pumping out devices we can all enjoy for years to come. Which is all that should really matter to any of us, gadget fans that we are.