Will low demand drive Palm Pre's price down?

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It’s won excitement as a long-awaited challenger to the Apple iPhone, but some financial analysts aren’t so sure the Palm Pre will set the market alight – with some predicting sales will start to slide soon.

A Morgan Joseph analyst sent a note to investors, advising them to sell Palm shares because the Pre isn’t selling as much as expected. Pre-sales last month were just 100,000 – half of the month before.

While it may be bad news for Palm, it could be good news for shoppers.

“Should sales prove to be in line with our checks, we believe price cuts may be looming going into the holiday season in an effort to spur holiday sales of the Pre,” analyst Ilya Grozovsky reportedly said.

A different financial analyst, RBC Capital's Mike Abramskay, suggested sales were inline with Palm's expectations of 550,000 shipped for the first quarter.

It’s not been a week of good news for Palm, as the Pre was accused of invading users’ privacy by sending location information back to the firm.

The Palm is yet to arrive in the UK, but is expected to do so later this year on O2.

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