Palm Pre vs All the Other Big Guys

With Palm stock at $14.82, a lot of questions arise. Why is a company that has around a -6 P/E with a 52-week low of $1.14 trading so high? What is so special about the new Palm Pre?

I have been researching the Palm Pre for the last week now and the more I look at it the more I want to short the Palm stock. My short sell comes from the fact that even if they do a good job, I don't see the price to be higher then $6 to $8. The product has to do stellar for the price to be justified at $14.

Here is a device with a very nice interface and features. But the problem for Palm is that there is a lot of competition. iPhone, Blackberry, Android, Windows Mobile devices, Symbian, and other devices.

If we look at the market share at http://en.wikipedia.org/wiki/File:Market_share_of_mobile_os_s_2008.JPG we see that Palm's market share is very little.


One thing that I saw on all the reviews was the ranting and raving about the multi-tasking. This is where the Pre user can open one program, such as Pandora, to play music and still run other programs at the same time. This isn't such a new hot feature as the Windows Mobile phones have had this feature since before the dark ages. For example, check out the HTC Touch/HTC Diamond phones or Palm's own Palm Pro (which runs Windows Mobile) and does the same exact thing.

This seems to be a lot of hype created the Palm company, Palm marketers, or company investors. I don't understand how they are justifying the $14 share price.

I was passing by the Apple store the other day where I see kids and adults looking at iPods and iPhones as if they are on the Its a Small World ride at Disneyland. With over 50k applications, how will the 18 application Palm compete? Its not going to be easy year for Palm.

Google, Apple, RIMM, and Microsoft are definitely not going to back down from the Smartphone market. Especially with their deep pockets, there is no way they are going to let "little" Palm take them down.