Palm Cuts Prices in the Face of Excess Inventory

Posted By: Ed Wednesday, April 11, 2001 2:29:24 PM

Palm is marking down the prices of almost all their handhelds in response to excess inventory. The Palm Vx is being reduced by $50 to $300, its second price reduction in a month. The Palm IIIc is getting its $30 discount made permanent, so it it now also $300. Finally, the price of the m100 is being cut by $20 to $130.

These cuts were announced today at an analysts' meeting and have already taken effect on the Palm Store.

At the end of their last fiscal quarter, Palm had over $100 million in unsold inventory on its books and it's possible that another $200 million in inventory may pile up this quarter. Analysts have cited Palm's excess inventory as being one of the top reasons for downgrading their ratings of its stock.

A Handspring spokesman has already said that his company doesn't plan to cut prices in response to Palm's announcement and isn't experiencing an inventory glut.

However, a Lehman Brothers analyst wrote earlier this week, "Given the high levels of inventory at Palm and in the channel, we believe there could be the potential for a price war come May, which would have a negative impact on both Palm and Handspring."

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On the Web: Thanks to David Chen for pointing this out. -Ed

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:x

Eston Bond @ 4/12/2001 8:23:44 AM #
Wow, now my Palm Vx is worth absolutely nothing.
RE: :x
I.M. Anonymous @ 4/12/2001 7:48:37 PM #
I know! Oh well....I'm not planning on ridding myself of it anytime soon anyways...if I get another one i will give mine to a family member.

RE: :>
I.M. Anonymous @ 4/12/2001 8:48:36 PM #
I paid over $2000 for a laptop a couple of years ago that I'm sure I couldn't get $200 for now. You should have realized from the begining that electronics don't hold their value. Heck, very little that you own is worth anything close to what you paid for it. Has anyone ever pointed out to you that driving a new car off the lot takes at least 40% off its value?

I suggest you don't sell the Vx at all because you won't be able to get anything like your money out of selling the replacement next year when Palm introduces the ARM-based handhelds.

The plan to buy all the latest stuff then sell it for most of what you paid for it is a gamble at best. Please keep that in mind.

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