They say scarcity creates demand and analysts are predicting that is the strategy Palm is going for with its much-anticipated Pre smartphone.
Taking the median estimate from six analysts, Bloomberg deduced that Palm will initially stock roughly 375,000 Pre units when it debuts later this year. Considering that Apple's iPhone sold 1 million units within three days of launch, this has the appearance of a deliberate attempt to generate buzz around an early sell-out.
“It’s important to have a success like selling out,” Hugues de La Vergne, an analyst at Gartner, told Bloomberg. “The Pre has to live up to the hype or else they’ll lose their momentum to rival products coming out soon after.”
In fairness, not every analyst offered the same rationale. GC Research's Tero Kuittinen believes Palm will face a supply shortage because "everyone and his uncle is into touch screen devices." Larger competitors may have easier access to phone components, but new entries like Palm will have a harder time, he said.
If Palm does intend to restrict supply, it's a pretty cheap means to reach a sell-out, and I think people will see right through that. Even if the headlines say all the Pres are gone in week one, comparisons to the iPhone's million sales will be inevitable. Aside from being unfair to customers, capping initial stock at such a low number will ensure that the Pre comes nowhere near the iPhone in popularity.
As for living up to the hype, how about designing a product that steals everything the iPhone does well and capitalizes on its faults?
