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Palm Pre hardware glitches hard to evaluate, analysts say

Customer forum complaints about shoddy hardware in the recently released Palm Pre are hard to put into perspective, analysts said, because the Pre is a first-generation device and its new WebOS operating system could still hold a lot of promise.

Palm Inc. is not commenting on the rate of returns of Pre handsets, which went on sale June 6. Some online forum writers are describing cracked screens, gaps in seams in the case, pixels missing in the display, and wobbles in the slide-out keyboard.

One PreCentral.net forum writer called Sivan said he had returned four of the devices. Others said after returning four Pres, it's time to move to another device.

DavidT, also on PreCentral.net, posted a photo of a gap in a Pre's case, apparently in an attempt to counter claims by others that Apple iPhone fans were infiltrating the forum in order to condemn the new Pre.

Edward Snyder, an analyst at Charter Equity Research, said it's hard to use the complaints in online forums as a basis for calculating the actual rate at which customers are returning Pres. He estimated that the return rate is in the high single digits, below the normal 10% to 15% rate for all smartphones.

“There are glitches here and there that need to be worked through,” Snyder told ABCnews.com . “But the success or failure of the company is hinged more on the WebOS.”

In fact, financially troubled Palm is generally expected to live or die on the success of the WebOS, not the Palm Pre hardware.

Palm could not be reached for comment.

Jack Gold, an analyst at J.Gold Associates, said the forum complaints aren't surprising, given the fact that user expectations were “set really high with all the hype around the Pre.”

Noting that the Pre is a first-generation device, Gold said, “Some glitches are to be expected, especially since Palm decided they must get to market by a certain date, no matter what.”

He said Palm has a history of putting products on the market “faster than they should have,” and this time Palm was probably rushing to beat the launch of the iPhone 3GS.

But with so many smartphones hitting the market, Gartner Inc. analyst Ken Dulaney said it will become more commonplace to see first-generation devices with a range of relatively small problems that are fixed in quick upgrades. Software upgrades are easier to provide than hardware upgrades. Indeed, Apple has taken about a year between launches of its three iPhone hardware devices.

Gold said complaints about hardware problems will probably be discussed for the next 60 to 90 days, and he noted that Palm might issue an upgrade. “Hopefully [that period of complaints] won't be too severe on their sales,” he added.

One forum thread entitled, “Is Palm going to have to recall the Pre?” seemed to get at the crux of the issue of whether returns are steep enough to pose financial difficulties for the manufacturer.

“Palm can't afford a recall even if it was necessary,” wrote a forum contributor identified as Smithwicks.

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