of the Pixi running webOS in October gave Palm a less expensive
smartphone for consumers to consider, but didn’t help Palm gain as
much as it had hoped. Palm has reported a larger
than expected quarterly loss for fiscal Q2 after revealing that
Sprint has sold less of the Pre and Pixi handsets than Palm expected.
Palm shares dropped 7.7% in trading
after the news was reported. Palm also reported a larger than
expected loss of 37 cents per share compared to the analyst
predictions of a 32 cents per share loss.
Palm is pointing the
finger at other devices available on the Sprint network like Android
phones from HTC and Samsung for the less than expected demand for its
smartphones. Palm says that it shipped 783,000 smartphone units over
the quarter, which is up 41% compared to last year. However, only
573,000 of the phones shipped ended up in consumer hands meaning that
Sprint has a huge stockpile of the devices sitting in its stores
The introduction of the Pixi also drove the average
selling price of a Palm handset from the $427 point last quarter to
$375 this quarter. Palm still maintains that it will reach its
predicted fiscal 2010 revenue forecast of $1.6 to $1.8 billion.
Analysts are wondering when Palm will break the Pre and Pixi free of
the less popular Sprint network and move it to other more popular
Analyst Shaw Wu from Kaufman Bros. said, "Number
one, when do they sign more carriers beyond Sprint here in the U.S?
At what time can they leverage their spending?"
The smartphone market is very
competitive and a new report issued this week found that Microsoft's
Mobile is the only OS in the smartphone realm losing marketshare.
The report also has the iPhone in second place overall with RIM in
the clear lead in the market.