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Palm sells less than half the phones shipped in winter

updated 05:30 pm EDT, Thu March 18, 2010

Palm winter quarter moves just 408K phones

Palm this afternoon reported a dramatic fall in smartphone sales for its winter quarter. The company shipped 960,000 smartphones between December and February but only sold 408,000 of those devices. Its shipments were exactly triple what it had supplied a year earlier but were countered by a 15 percent drop in actual sell-through to users at carriers like O2, Sprint and Verizon.

It still managed to generate a $47 million gross profit but in practice suffered a $102.8 million net loss, wider than the loss in winter 2009 and more than twice the $45.5 million lost in the fall. Much of the widened loss may come from the increased shipments adding costs that weren't matched by revenue from phone sales. The current figures were nonetheless higher than the recently lowered guidance and may have represented signs of a bounce back in performance.

Most sales were actually for the less expensive Pixi, contributing to a drop in the average price.

CEO Jon Rubinstein called the results "very disappointing" but, during a conference call for the results, said the company had confidence that webOS and the Palm roadmap would put the company "in good stead." He highlighted the company's plans to revitalize sales at carriers and said there was "anecdotal evidence" of climbing sales, but didn't have concrete numbers. Some of the lessons learned from launches at Verizon and elsewhere will help at additional carriers, Rubinstein said.

The company doesn't foresee a quick turnaround and still expects to burn through cash this year, but it should continue to operate through the rest of the year without needing additional help.

As part of the fiscal results talk, Rubinstein reiterated an comment that the company isn't completely set on limiting webOS to its own devices but would only be willing to license the platform if a "partnership" came along that made business sense for the company. Speculation has existed that the company might turn to licensing webOS or even sell itself to a larger smartphone manufacturer.

by MacNN Staff



  1. ricardogf

    Joined: Dec 1969



    PALM IS DEAD. Better sell yourself back to Apple, Mr. RubinSTEIN.

  1. iphonerulez

    Joined: Dec 1969


    iPhone killer Pre...

    committed suicide. WebOS is good, but Palm is a lousy company running on fumes. Any time a smartphone company can't develop its own synching software, it's in pretty bad shape. Share price has gone from about $15 to about $5 within six months. It seems the only way this company will survive is from a buyout. It might be a good acquisition for RIM.

  1. solefald

    Joined: Dec 1969



    i wonder why. /s

  1. WiseWeasel

    Joined: Dec 1969


    Pre Is Nice

    You guys are being way too harsh. I recently saw some commercials for the new Palm Pre Plus on Verizon, and it looks pretty damn sweet; the interface is nice and cohesive, it does multi-tasking elegantly, and you can install apps not from their app store in a supported manner. If Palm sticks with it and keeps adding carriers, I think they might do alright, maybe giving Android, WP7 and even the iPhone a run for their money, and certainly helping to put pressure on Apple to make the iPhone better, for more people.

    Competition is great, and we should be cheering for Palm's success if we want the highest rate of progress in phones possible, not for their failure. Palm at $5.65 is making me think pretty hard about picking up a bit of their stock, maybe even trading in some of my AAPL, which I'll admit has done quite well. I say all this as a Mac, iPhone and iPod user and Apple shareholder, so I've got no personal stake in promoting Palm other than promoting competition in general. They're putting out some pretty attractive products right now, and they deserve praise for that.

    MS would have been much better off buying out Palm, porting the whole Live gaming and ActiveSync thing to WebOS, and calling it a wrap than to start from scratch several years behind everyone else. RIM could certainly do a lot worse, and that might do nice things for PALM's stock value...

  1. coffeetime

    Joined: Dec 1969


    Palme and MS

    If Microsoft buyouts Palm, MS would literally crush it and make it disappears. But why would MS waste their money on it anyway, MS will stand on its side watching it die slowly and naturally.

  1. c4rlob

    Joined: Dec 1969


    Palm was dead from day one of the Pre

    Who on Earth would want or even needs WebOS? Microsoft just dropped a new Phone 7 Series (or whatever it's called) that they're heavily invested in; Apple isn't looking for a new OS, and Google and anyone else worth anything is adopting Android. So Palm is approaching a waterfall with a toothpick paddle.

    I remember on day one of the Pre, the one lonely yellow ballon bouncing around in front of the Sprint store without a soul waiting in line. It was clear then that no matter how great the Pre was (and it was only good, but not great) - not enough people cared. And Palm has done their best to get people to care, but not enough. The most successful phones have been phones with no keyboard but with large amazing touchscreen experiences or phones with so-so touchscreen experiences but a large landscape keyboard. Palm hurt themselves too much by compromising on both input methods.

  1. Zanziboy

    Joined: Dec 1969


    All Googled Up - Nothing Left

    If it's a smartphone, and it's got a keyboard, it's an Android clone phone.

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