updated 11:55 am EDT, Wed September 30, 2009
Palm may be cutting jobs
Palm is engaging in a fresh round of job cuts due to disappointing sales of the Pre, according to a pair of assertions made today. One tip has the smartphone creator laying off some staff within the US. Numbers and the particular divisions affected aren't mentioned by CoolSmartphone; the move is only known to be prompted by "restructuring."
One analysis issued today suggests that the cuts may be necessary given not just Palm's wider losses but also a possible masking of actual Pre sales numbers. As the company's recent 10K filing with the Securities and Exchange Commission only counts deliveries to Sprint as sales rather than sales through partners like Best Buy and Radio Shack, it's suspected by TheStreet that a reported 13,000-phone increase in inventory doesn't reflect a much larger glut of phones left unsold the channel. Palm is estimated to have actually sold about 375,000 Pres but to have as many as 275,000 phones still in stores, or enough to last it for another 11 weeks. Apple by comparison often has only about four weeks.
The poor sales are attributed to two of the most commonly cited problems with the Pre's availability on launch. Its $200 contract price was considered high in June and was cut to $150 just over three months later, not including third-party discounts that have brought the phone to as low as $80 at Walmart. Also, Palm's now almost exclusive dependence on Sprint in the US may be a liability as it not only limits the reach of its phones but could lose a bargaining chip when trying to negotiate a fair price from Verizon or other carriers.