Palm Pre Customers Grumble About Defects

July 1, 2009— -- Web forums and tech blogs are abuzz with comments from some Palm Pre customers who shelled out $199 in early June for the new smart phones only to watch them come apart at the seams.

Some customers grumbled that the screens on their phones have cracked. Others have noticed a gap where the two sides of the device should connect and problems with the phone's sliding hinge.

The most loyal Palm Inc. fans, so determined to stick with the Pre, have returned units twice, hoping that the third time is the charm.

"My feeling at this point is that it's pretty clear that there is something – either a bad run or something wrong with the design," said Dieter Bohn, editor of PreCentral.net, the largest online community of Pre owners with 170,000 members.

Bohn emphasized that it's tough to say how many Pre customers are experiencing hardware problems with the device. Those who are pleased with their devices may be less likely than those with grievances to speak up.

Online Forums Provide Anecotes Only

And analysts point out that these forums only provide anecdotal evidence about the phone.

But complaints on PreCentral.net reached such a pitch that Bohn wrote a blog post about it Tuesday, saying that "it does appear that we may be looking at a rather large set of Pre phones with poor build quality."

One customer posted to the online forum, "Im on my THIRD pre (yellow box). Over the last two weeks, i've noticed an increasing amount of play with the screen. I've also noticed that on the left side of the device the two sections are separated enough that i can almost see the innards. When I push them together, you can hear squeaking. On top of that, the device came with a loose power button that doesn't click nearly as firmly as that of other devices."

After Kevin Tofel, editor of the tech blog JKOnTheRun, wrote a post on the hardware problems Tuesday morning, one Pre owner commented, "Yeah I will be exchanging mine as well. It is squeaky when i type on it, and I have found that if you squeeze thew pre in a weird way OR slide the screen down a tad to hard my unit just turns off in a blink of an eye…..

Analyst: Palm Has Sold 400,000 Pres

Another Pre customer, so frustrated with the device, abandoned the brand altogether, writing, "Man I hear ya..I hated to but I had to take mine back and go back to the iPhone. I tried to tell myself I just needed to get used to it but in the end couldn't."

Representatives from Palm did not immediately respond to requests from ABCNews.com requesting comment.

But Edward Snyder, principal analyst with Charter Equity Research, said that these online comments don't tell the whole story. As the comments provide only anecdotes, he said they can't be construed as data points.

"With the launch of most new smart phones, you end up having issues," he said. "We do know that the return rate on this phone is pretty low."

Although Palm executives declined to disclose official return rates for the Pre in an investor call last week, Snyder said he estimates that the figure is in the high single digits. Usually, the rate of returns for smart phones is in the 10 to 15 percent range, he said.

Palm's WebOS More Important to Company's Future

"There are glitches here and there that need to be worked through," he said. "But the success or failure of the company is hinged more on the webOS."

The much-ballyhooed Palm webOS is the company's new operating system that, unlike the iPhone's system, lets users keep multiple applications open at once. It also integrates information from multiple mobile applications.

Snyder estimates that the company has sold nearly 400,000 Pres (about 300,000 since its launch on June 6 and 70,000 more in May).

Those figures are not as impressive when compared to the one million iPhone 3GS smart phones sold by Apple in just the weekend after its launch a couple of weeks ago.

But in its call with investors last week, Palm said the Pre helped it post better-than-expected earnings last quarter.

Independent analyst Rob Enderle said Palm generally has a good reputation when it comes to hardware, and new products often come with new problems.

"It isn't uncommon for the first run of a new phone to have issues," he said. "Generally, this is why I recommend holding off a few weeks when a new design comes out so they work the bugs out of the initial runs."

Palm Fans Defend Pre

And many Pre fans have been stepping up to the plate to defend Palm's newest device.

"I love my Pre. I have had zero problems with it. And I use the phone constantly, sliding the keyboard in and out countless times per day...," wrote one commenter on PreCentral.net.

Another chimed in, "I know 3 people with the pre none of their phones or mine have any of these issues i do think there are some bad ones out there but i think the good ones far out weigh the defective ones."

Overall, PreCentral.net's Bohn said the smart phone holds promise.

"I think it's an incredibly strong 1.0 product. It's very good. It does what is needs to do for Palm as a company," he said. "But they're not done yet. They need to keep improving software on the phone."