Palm cuts guidance on "slower than expected" sales
updated 09:30 am EST, Thu February 25, 2010
Palm admits new phones not taking off
Palm triggered alarm today by cutting its guidance for its current quarter. The company now expects to make between $285 million and $310 million in revenue and directly blames the shortfall on "slower than expected" take up of the Pre, the Pixi and their Plus equivalents. Carriers have also ordered fewer devices and in some cases delayed receiving orders until later.
Company chief Jon Rubinstein was quick to downplay fears and stressed that carriers are still pledged to its phones, although he also pledged to have the networks step up advertising to make sure customers know Palm is an option.
Regardless, the smartphone maker signaled likely major trouble ahead as it now expects its total fiscal year ending in May to generate revenues "well below" the originally estimated $1.6 billion to $1.8 billion.
The statements come just on the heels of rumors of disappointing Verizon sales and point to Palm being squeezed by competitive pressure on the networks it uses. At Verizon, the Motorola Droid and HTC Droid Eris are currently the flagship devices and compete very closely with the Pre Plus and Pixi Plus on price. At Sprint, Android phones like the HTC Hero and Samsung Moment are given secondary billing but are still likely to have diminished Palm's importance.
The company's near-term future will depend on adding further carriers, including AT&T in the spring and possible additions from T-Mobile and other, international providers. However, Palm may face even steeper competition as iPhone pricing will likely force prices at or below the $99 charged for an iPhone 3G.
Fresh-Faced Recruit
Joined: Jan 2010
beginning of the end
sad to see you go, but you were a one trick pony, this fast changing market will only have 3 players from 2011 and onwards.
1. Apple; iPhone, iPod & iPad
2. Google's Android
3. RIM or Nokia
The number 3, seems to have a weird place, as people remember numbers better in 3's, the games market has only 3 players, Nintendo, Sony, Microcopy, medal winners are in 3's, gold, silver, bronze, smartphone market only 3 players. The power of 3 will apply again. Makes life a bit less complicated as well. And in this market, 3 is plenty, any more is not required.