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Palm sales jump 134% thanks to Pre, losses widen

updated 05:00 pm EDT, Thu September 17, 2009

Palm summer quarter 2009 results

Palm today reported a turnaround in its results for its just-ended summer quarter. Compared to the spring, the company's smartphone shipments surged 134 percent and topped 823,000 devices, nearly all of which were successfully sold. The number is a 30 percent drop from summer a year earlier but is believed to have stemmed much of the rapid decline in the company's influence.

Palm is on track for fostering a "culture of innovation" that it had lost and is "turning its sights toward growth," company CEO and former Apple executive Jon Rubinstein said.

The company at the same time acknowledged that the Pre by itself hasn't completely addressed financial performance. Palm swung from a $97.3 million gross profit in spring 2008 to a $2.8 million gross loss, and saw its net losses grow from $39.5 million a year ago to $161.1 million in the past quarter. Some of this was attributed to the much more aggressive marketing effort for the Pre than for earlier PalmOS and Windows Mobile-based phones. Research and development also played a factor. However, the company also noted that its accounting practices for the Pre also masked much of the Pre's actual success. Following Apple's model for the iPhone, the revenues for the Pre and future webOS phones are only accounted for over the course of two years and don't reflect Palm's actual cash on hand.

For the future, the company is hinging most of its future on expanding Pre sales to other areas, such as the UK at the end of 2009, as well as on its upcoming $99 Pixi phone. However, the company expects its fall quarter results to be lower than for the summer as both dropping sales of non-webOS phones and the anticipated post-launch cooling of demand for the Pre lead to reduced total shipments.

Most companies hadn't expected Palm to compete on the same level as obvious rivals Apple and Research in Motion, but the turnaround is already seen as the first step in a recovery for Palm, whose market share dropped quickly in the past as the stagnation of PalmOS and the lack of compelling Windows Mobile phones led customer to consider alternatives like the iPhone and BlackBerry lineup.



By Electronista Staff
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Comments

  1. driven

    Addicted to MacNN

    Joined: May 2001

    +1

    Shame

    There was a time that Palm was King. Losing control of their OS and then switching to Windows Mobile has all but killed them. The Pre is really a non-player as of now, but I have a soft spot for them and I really hope they are able to make a go of it with WebOS. Besides, I think Apple will produce even better iPhones if they have some REAL competition. (Right now there still isn't any)

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Non-player

    The Pre is a non-player? Hmmm, I don't think Palm thinks that, being how it helped their sales.

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