was on a sharp slide over the last couple years, thanks in part to
the rising success of Research In Motion's Blackberry smartphones and
the Apple iPhone. That's a foreign position for the company, as
it was on the forefront of the smartphone revolution, releasing one
the Treo 180 back in 2002 (five years before the first iPhone).
As the PDA market vanished and was replaced with smartphones, Palm
was beat by faster competitors in the race it helped
launch.Recently, though, Palm looked to turn things around
with the release of the Palm
Pre and Palm Pixi smartphones which are powered by its
latest operating system, webOS. It also scored
a deal with Verizon, America's largest carrier. Despite
this big boost, it delivered
some disappointing news this week; it forecasted a revenue
of between $300M to $320M USD in its fiscal third quarter that ends
this month. That's well below the $424.7M USD average
analysts estimated.The weaker than expected revenue was a
result of poorer than expected sales. Palm is predicted to only
move 750,000 smartphone units in the quarter, down from the average
analyst estimate of 1 million units. As a result of the bad
news, Palm stock plunged over 24 percent in busy trading today and
yesterday.Part of Palm's problem is that Verizon hasn't
aggressively marketed the Palm Pre and has been much more vocal about
its Android phones. Some think that Palm's poor performance may
sink a prospective deal with America's number 2 carrier, AT&T,
which announced earlier in the year than it would carry two Palm
smartphones (likely the Pre and Pixi) in the first half of this
CEO Jon Rubinstein moved quickly to reassure employees,
sending a company
wide letter stating that he feels the firm will soon turn the
corner, thanks to the Verizon deal. In the letter he details
plans to send 200 "Brand Ambassadors" to Verizon stores
nationwide in the U.S. to help push Palm's smartphones. He also
points out that Palm does have a cash stockpile of $500M USD, which
it can use to survive during a few rocky quarters.The company
also reported some good news for its smartphone customers -- a new
webOS update for the Palm Pre and Palm Pixi will air today.
The update, webOS 1.4, will be initially available from Sprint only,
but expect Verizon to soon follow shortly. The update is packed
with goodies, from bug fixes, to video capture and editing.
Among its best additions, though, is the inclusion of an early build
Flash 10. Having Flash gives it access to the internet's
wealth of Flash apps and games, a catalog rivaling even the Apple App
store's. And while some of the apps may not be well suited for
Palm's screen resolution, they do enjoy the advantage of being
largely free (ad revenue supported).Despite the bad news, the
overall picture is that Palm may be down, but it's by no means out of
the smartphone race.
quote: And I also expect Nokia and motorola to make a resurgence when the move to smart phones gets old who can manufacture capable devices at low costs comes back into play.
quote: I really think the old phone-which-is-only-a-phone is dead.
quote: I don't think that's ever going to happen. Instead, what I'm seeing is smart phones whose sophisticated capabilities are hidden behind a simple or slick interface. People aren't going to see much difference in ease of use between those and low-cost phones.
quote: And with most of the price difference hidden in monthly usage fees, there isn't going to be much up-front cost difference either.