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Saturday morning marked the awaited launch of the Pre smartphone from Palm Inc. (NASDAQ: PALM) under an exclusivity carrier pact with Sprint Nextel Corp. (NYSE: S).  We think this will offer some competition to Apple Inc. (NASDAQ: AAPL) for the iPhone and some for Research in Motion Ltd.’s BlackBerry (NASDAQ: RIMM), but how much real competition is another matter.  We started the calls to prominent stores located in prime areas of cities late morning Saturday to give them time to check-out the first buying customers.  We had to use Best Buy (NYSE: BBY) in the store call-ins, but some Sprint stores in hot locations still had phones.  This was far from a nationwide survey on Saturday morning, but here are the notes from our calls:

SPRINT 3901 Richmond (Houston): actually had a few left at 11:00 AM local.

SPRINT 1801 Durham (Houston): Had 1 left from allocations right before 11:00 AM local.

SPRINT 2850 Broadway (Chicago): sold out very fast

SPRINT 4017 Lincoln (Chicago): sold out, but last customers being checked out after almost 3 hours.

SPRINT La Crenegea (West Hollywood): Got 106 in and was on customer 90 as of 9:50 AM local.

SPRINT 8500 Beverly Blvd (L.A.): “Have a few left”

SPRINT 1465 Westwood (L.A.): out entirely, but only received 30 units.

BEST BUY 62nd & Broadway (NYC): sold out immediately, but tiny allocation was given.

BEST BUY Galleria/Richmond (Houston): “Got lots in and sold out fast from line in front ahead of the store opening.”

BEST BUY Katy Freeway. (Houston): Sold out, but no commitment on how many…

BEST BUY Clark (Chicago): sold out as of about 11:00 local

BEST BUY Bucktown (Chicago) sold out very fast, few units came in

BEST BUY West Hollywood (L.A.): Sold out, little bit of a line in front when store opened.

BEST BUY Curtner (San Jose, CA):  Sold out, but small shipment.

BEST BUY 1717 Harisson (San Francisco): Sold out as line was 25 at 9 AM, opened at 10.  But guy said shipment was only 13 phones or something.

It seems easy to have a sell-out when so many stores in prominent areas are getting so few shipments in.  iSupply gave a figure that 1.1 million shipments were possible by the end of 2009.  Also, after making the calls around, it is pretty sad to see how many stores just have no one that can or answer a real telephone at Best Buy locations in New York and L.A.  Maybe they were jammed up and too busy, or maybe that is just the way of the world.

Palm stock has a massive short interest as many traders are betting that the phone cannot become enough of a buffer to save the company.  The two most recent short interest reports showed more than 34 million shares were listed.  There also appears to be a short interest of more than 50,000 contracts in each of the June PUT and CALL options which expire on June 19, 2009.  Shares closed down almost 5% at $13.00 Friday, and the 52-week range is $1.14 to $14.14.

JON C. OGG