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 Electronista Staff