Palm Pre has a halo effect for Sprint

Computerworld - WALTHAM, Mass. -- Sprint Nextel Corp. has weathered financial and customer care problems in recent years, so the carrier has a lot riding on the success of its new Palm Pre smartphone. Some early indications are positive.

Demand for the device, which went on sale June 6, has "exceeded expectations," said Tim Donahue, vice president of business marketing at Sprint, in comments to reporters at the Sprint Productivity Now conference for business users. Customers are being put on waiting lists with an average waiting time of a week or less, he said.

Sprint and Palm Inc. won't divulge actual sales figures, but analysts estimated that up to 100,000 Palm Pre devices were sold in the first weekend in the U.S. In comparison, Apple Inc. said it sold 1 million iPhone 3G S devices globally in its first weekend of availability.

Sprint is also capturing customers from other wireless carriers, although Donahue wouldn't detail how many.

"We're seeing a good balance of new Sprint customers" and existing Sprint customers, he said. "The device is interesting and compelling to people with other carriers."

While the Pre might seem like the latest alternative to the iPhone for consumers, it is also striking a chord with business users, Donahue said. "On the business side, the Pre has the majority of things you'd want for business uses, and it has a coolness factor," he said. "The physical keyboard is a big deal to business users, and you can get Exchange out of the box. But even business users like to be a little cool, so that's why we're seeing business-to-business users" buying it.

Donahue conceded that business users are buying the device for personal and business use without the support of a central IT department. "IT will evolve to support it as we put more advanced security features it," he said.

Palm has said that a set of security features is coming in less than 60 days. Donahue said he can foresee Palm and Sprint eventually backing a centralized management approach similar to Active Sync from Microsoft Corp. "It won't be a BlackBerry Enterprise Server equivalent, but more in the Exchange Active Sync environment," he said.

How extensively the Pre will be adopted by large businesses is not clear. One Sprint business customer at the event asked whether there is a way to prevent sharing of her publishing company's proprietary information through social networking sites over Pre devices used by employees at her company. A Palm official, who asked not to be named because he's not a company spokesman, told her that the Pre won't sync information from social networking sites, so the information cannot be stored on the smartphone. However, there is also no central management of the Pre to prevent employees from accessing social network sites.