Analysts tempered their enthusiasm for Palm Inc.'s Pre smart phone, which went on sale this weekend, with limited supplies of the device and a relatively small number of software applications drawing concern.
The Pre went on sale Saturday, and store managers report that they were sold out by noon. With a slide-out keyboard and touch screen, the Pre has drawn good reviews from prominent tech critics and raised hopes that Palm can ride the phone to better fortunes.
But pitfalls remain for the Sunnyvale, Calif., company. Analysts note the smart-phone market is growing more competitive, with Apple expected to release an updated iPhone soon.
One shortfall gaining notice is the smaller number of third-party software applications available for the Palm compared with the ever-expanding universe off iPhone apps.
In a note to clients Friday, Thomas Weisel analyst Matthew Sheerina called the lack of applications a "major concern," reiterating his "Neutral" rating on Palm shares.
He added, "We do remain concerned about the ability to bring on significant volumes" as well as "the onslaught of competitive devices we expect to be announced over the coming months."
On the other hand, Sheerina said, "We expect first impressions from customers after this weekend to be positive and could see" Palm shares continue to rise.