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Technology Stocks : PALM - The rebirth of Palm Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Tom R. Clarksburg who wrote (3873)	2/21/2001 10:44:56 PM
From: P.M.Freedman	Respond to of 6784

Many companies have approved the budgets for PDA purchasing in this year. Although many sale channels may not book PDA products as many as in the holiday season, I believe the shipments in last month should not be as bad as Neff estimated (he thought to be $51 million only). The recent NAZ sell off was purely technical play. Does anyone here feel inflations (excluding gasoline)? We knew the prices in the holiday season were pretty low. The pressure from increasing wages has been eliminated by the bear markets. Yes, new home sales have been sky high for quite awhile. But that's not new. It has been like that over a year. There are so many traders who were newly trained in this year-long bear market. They short every stock that chartwise shortable. Playing as a bear in last year won big. However, many professional players have quietly turned to accumulations. Recently, bears' down-down song became so loud, louder than ever. It may be a sign that the markets is at a turning point. Good luck!

To: Tom R. Clarksburg who wrote (3873)	2/21/2001 11:01:36 PM
From: Mang Cheng	Respond to of 6784

Tom, thanks for your information. Sounds like you really have done a lot of work doing channel checks. Yes, as private investors, we need somebody with your experience and ability to do our own objective and reliable channel checks - instead of relying on results published by short sellers of the stock. Based on your research, sale of Palm VII seems to be really picking up and that's what being promised by Yankowsky on the cc. Instead of wasting money promoting Palm VII on TV, magazines etc, they decided to benefit the users by giving them $100 directly to be used for airtime - which I think is a very good idea. Not only does Palm VII has a higher margin but it will introduce more customers to the Palm.net. Carl, in his last guidance, might not have included the increased revenue from the Palm VII - because that guidance was given long time ago when the parts constraint was still very tight. First, I hope there won't be a profit warning in the coming. Second, I would like Palm to beat revenue estimate this qtr. Mang

To: Tom R. Clarksburg who wrote (3873)	2/22/2001 3:51:16 PM
From: David E. Taylor	Read Replies (1) \| Respond to of 6784

Tom: Thanks for the info from CNET on PALM VIIx inventories. As I said I haven't factored in recent sales data yet, I was just looking at the potential impact if Palm reports in line with the forward guidance, which is what drove the stock price down after the Q2 report. One of the assumptions I've been making is that the VII and VIIx sales are reflected in the Palm.net subscribers up to this point. I believe that's the only way to use the VII's wireless capabilities, but I'm sure one of the VII users here will correct me if that's wrong. If that assumption is correct, the number of Palm VII's sold through Q2 is around 149,000, the number of Palm.net subs, so your 400,000 to 500,000 Palm VIIx's shipped in the 7 weeks or so since 1/14 is a big increase over historical sales levels for the VII series. If the retailers can sell them all (and your numbers imply around 360,000 sold thus far), Palm.net subs should show a dramatic increase in the next earnings report, since the $100 rebate program (running 2/15/ through 12/31/01) is conditioned on sign up for one year to either the "expanded" $24.99/month plan or the "unlimited" $44.99/month plan - a cellular phone service model where the handset is subsidized by the service revenues. I wonder what the retailer mark-up on the VIIX is, and what % of Palm VIIx's are sold direct off Palm's web site? Quoted prices range from $335 to $399 (before the $100 rebate), and using a typical 1/3 mark up would put Palm's ASP for the VIIx at around $300 for the $399 price, but leave a slim 12% for anyone selling at the lowest $335 price. But even with a $300 ASP net to Palm, to make your $211 million in sales from the VIIx, Palm has to sell around 700,000 units, which I think is on the optimistic side for the quarter, which is almost over. I also think your accessories number of $71 million is on the high side, those sales tend to track device unit sales pretty closely, and even with the boost from the VIIX sales, I expect total units sold and hence accessories to be no better than flat with Q2's $45.8 million. If the retailers can sell most of the VIIx inventory they've apparently taken on before the end of Q2 (unlikely IMO because the rebate program didn't start until 2/15) then there will be a big jump in revenues in the "Content and Access" category, but how much this Q? Enough to boost OS licensing + content /access from Q's $15.5 million to your $25 million? Maybe, since in the long run, another 400,000 new users at a minimum of $24.99/month = $10 million/month extra in revenues, and some of this should show up in Q2. Overall, I think your $518 million for Q2 is a stretch, but I'll be delighted if it materializes, since it would definitely help the stock price. More later when I've crunched some numbers and updated my model. I appreciate your willingness to share your info with the thread, although news and product announcements are going to provide a short term boost, we seem to be back to fundamentals of revenues and earnings growth as the main drivers. One last thought for now - the timing of the VIIx rebate program is likely to draw the same criticism as the IIIx program did - ship a bunch of units into the channel before the Q ends and book the revenue in Q3, but don't start the rebate program until the Q is almost over, thereby pushing the cost of the rebates through into Q4. It doesn't bother me personally, since they need to move out inventory to make way for the new models, but it's bound to draw the same sceptics as before. I wonder why they haven't started a similar rebate program for the Vx, since we expect that to be the first model to be supplanted in March. Maybe they'll sell them off via price cuts as they did for the III's. David T.