Sales Double: Over 3 Million Treonauts Worldwide!

Last week Palm released its latest quarterly results which highlighted that sales of Treo smartphones have grown by over 100% from the same quarter a year ago to a record 569,000 Treo 650 and Treo 700w units…

Additionally, Palm reported that this was its 9th consecutive quarter of double-digit, year-over-year revenue growth.  Moreover, sales of Treo smartphones now account for 74% of the company’s revenues up from 46% a year ago and 28% two years ago.  Furthermore, according to Canalys market research Palm concluded the year with 30% US market share versus 22% last year.  Clearly Palm has done a terrific job at growing its Treo smartphone business and completely revamping its revenue mix away from PDA’s in the process.

One of the things that I have wanted to know for a long time though is how Treo sales in the quarters since its launch compared to another iconic handheld device – namely the iPod.  With Palm’s latest figures at hand and a few hours of online research trying to find the equivalent quarterly iPod sales data I was finally able to put together the two charts below which revealed some rather interesting facts.  [Please note all figures are in thousands.]

For starters, as you can immediately see in the chart above, cumulative Treo smartphone sales since the launch of the Treo 600 in October 2003 have on average actually been some 40% higher than the iPod over the similar period since its launch in November 2001.  Another thing to keep in mind is that while the iPod has been on the market for 17 quarters the Treo has only had 9.

Assuming that sales of the Treo will continue to grow at a rate of 110% over the coming three quarters we should see cumulative units doubling from the current 2.8 million figure to over 5.6 million by the end of this year…

Clearly, the chart above shows that Treo sales have followed a strong upward growth since its launch with every new smartphone generation providing additional momentum.  As I pointed out earlier, Treo unit sales for the current quarter (Y3–Q1) stands at 569,000 having grown 111% from the same period a year ago and I have projected a similar growth rate for the coming three quarters with 884, 940 and 870 thousand units sold respectively.

It is obvious that with the expected launch in the next three quarters of all the new Treo smartphones below Palm has many opportunities to increase sales even further:

• Treo 700p (running PalmOS) with Sprint in May/June
• Treo ‘Hollywood’ with Cingular in the US as well as Orange and/or Vodafone in Europe combined with a lower cost Treo ‘Lowrider’ sometime in Q3
• Treo 700w (running Windows Mobile) with Sprint either in Q3 or Q4 and potentially also with Orange and/or Vodafone in Europe at the same time.

Since I’m on the subject of opportunities, considering that only 20% of Treo sales are outside the US it is clear that Palm has plenty of room for growth abroad and among others it has been working closely with European carriers to ensure that it can deliver a custom Treo more suitable to local design tastes.   Additionally, the global market at large is still mostly ignorant of the many benefits that Treo smartphones can deliver both at work and at home and only 2% of business email boxes are currently accessed on the go…

Moreover, it is worthwhile noting that iPod sales spiked massively thanks to the introduction of ‘low cost’ models such as the Mini, Shuffle and later Nano which evidently helped to stimulate the overall penetration of iPods (the launch of the iTunes Music Store in Q9 was also extremely important).  I expect that with Palm’s introduction of its own low cost Treo ‘Lowrider’ model we will see a similar surge in overall Treo unit sales in the coming quarters.

Finally, returning to Palm’s quarterly report, it is worthwhile pointing out some of CEO Ed Colligan’s most interesting comments:

• “We [plan to] launch additional smartphones this year on two platforms – Windows Mobile and PalmOS – and introduce products designed to accelerate our smartphone expansion in international markets.”
• “Last quarter, I shared with you that Palm would introduce four new smartphones in calendar year 2006.  When I say new smartphones, I am referring to a combination of operating system, new hardware design, new radio technology or other significant advancement.”
• “You’ll see additional differentiation on Windows Mobile products yet to be announced.  We look forward to further collaboration with Microsoft to bring more Treos to market here and abroad.”
• “In one study of more than 530 US IT managers, Treo smartphones were preferred by 43% of respondents – well more than any competitor.  Thre preference for Treo is so strong that 29% of registered Treo 650 customers surveyed said they switched carriers just to get it.”
• “We’re especially eager to deliver a Microsoft Messaging software update and a Security Feature Pack, which will enable “direct push technology” on the Treo 700w.  We expect enterprise deployments to accelerate when this update is available soon.”
• “In partnership with RIM , we completed the core client software for Blackberry Connect on the Treo 650.  Interested carriers are now in the process of certification testing.”

Considering that today marks the 10th Anniversary of the launch of the original Palm Pilot (congratulations to all at Palm and PalmSource) I can only begin to imagine what the next 10 years of Treo-(R)evolution will hold in store for us…  Certainly this coming year promises to be rather exciting!

PS: To celebrate Palm’s Anniversary as well as cumulative Treo sales surpassing 3.0 million units (calculated using projected growth rates) we have developed a dynamic counter located in the top left navigation column which estimates the current total number of “Treonauts Worldwide”.

Treonauts grow stronger by the day…