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Palm Pre A Weak Draw For Sprint

The touch-screen smartphone has received good reviews, but the majority of Pre buyers were already Sprint mobile customers.
Palm Pre
(click image for larger view)
Palm Pre

While the Palm Pre is breaking Sprint Nextel sales records, the handset appears to be failing to draw new customers to the third-largest U.S. wireless carrier.

According to a report by Wachovia Securities analyst Jennifer Frizsche, the majority of Pre buyers were existing Sprint customers upgrading from a feature phone or a different smartphone. While re-signing existing customers to new two-year contracts is positive for Sprint, some industry watchers believed the Pre had greater potential to poach subscribers from rivals such as AT&T, T-Mobile, and Verizon Wireless.

Sprint still has nearly 50 million subscribers, but it was the only major carrier to have a net loss of subscribers last quarter. The third-largest carrier has lost more than 4 million subscribers over the last year because of real and perceived issues with customer service, and popular handsets offered by other carriers.

Apple's iPhone has proven to be a device that people will switch carriers for, and it's a major driver of AT&T's new subscriber growth. The Pre has not achieved the same level of success, but it has generally received positive reviews for its webOS operating system and its design.

One reason the Pre may not be getting customers to switch to Sprint is that it will only be an exclusive device for a relatively short period of time. The CEO of Verizon Wireless has already said a device like the Pre will be coming to Verizon's network in "six months or so." By contrast, the iPhone has been exclusively on AT&T's networks for the last two years, and it will remain so for multiple more years if AT&T has its way.


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