Palm is cutting its revenue forecast for the year after the smartphone maker reported slower than expected sales of handsets. While Palm did not mention specifics, analysts believe sales of the Palm Pre Plus and Pixi Plus with Verizon have been slower than expected. Palm's stock has fallen to record lows.
"Palm webOS is recognized as a groundbreaking platform that enables one of
the best smartphone experiences available today, and our work to evolve the
platform and bring industry-leading technology to market continues," Palm CEO
Jon Rubinstein wrote in a statement. "However, driving broad consumer adoption
of Palm products is taking longer than we anticipated. Our carrier partners
remain committed, and we are working closely with them to increase awareness
and drive sales of our differentiated Palm products."
For the fiscal third quarter of 2010, Palm is now calling for revenues of
$300 million and $320 million. Wall Street analysts had been calling for
revenue of about $424 million in the quarter. For the 2010 fiscal year, Palm
said it expects revenues to fall below the previous forecasts range of $1.6 billion
to $1.8 billion.
Palm's revenue woes come at a time when the worldwide handset market appears
ready for a comeback following a slow 2009, when the industry saw revenues and
shipments drop thanks to the global recession. A new report from Gartner
found that Apple's iPhone and smartphones using Google's Android operating
system helped the market bounce back in the fourth quarter of 2009.
There's also a matter of fierce competition in the smartphone market, where
handset makers are not only looking to capture traditional business customers,
but also more and more consumers. The Garter report found that Research In
Motion's operating system, which runs on the company's BlackBerry handsets,
shipped on 34 million smartphones in 2009, while the webOS shipped on only 1.1
million. In addition, the number of smartphones running Google Android grew by
Palm had hoped the Pre and Pixi, along with webOS, would help the company's
comeback after several years of watching RIM and Apple take the lead in the
smartphone market. Now, those plans seem in doubt.
Palm plans to announce its latest quarterly results on March 18.
By the end of day on Feb. 25, Palm's stock was trading at $6.53. During the
past 12 months, the company stock traded as high as $18 a share.