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Despite promising smart phones and a new contract with Verizon, Palm has continued to struggle this quarter. It did, however have some good news -- an update that will enabe video recording and Flash on the Palm Pre.  (Source: Palm via VentureBeat)
The veteran smart phone maker continues to struggle

Palm 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 year.

Palm 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 of Adobe's 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.

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RE: Out
By sxr7171 on 2/27/2010 2:59:37 PM , Rating: 2
I use an iPhone 3GS but I have no qualms saying that the Pre is actually a superior phone. It reacts and responds to user input as well as the iPhone. It multitasks. But its interface is superior to the iPhone's. So well thought out and ergonomic. While iPhone makes you stretch your finger all the way to the upper left and right hand corner and makes you press a button located in the worst place (should be on the side of the phone) the Pre never makes your finger leave the bottom of the screen to do anything.

It's really well thought out, very smooth and ahead of Android with no doubt in terms of interface.

The problem is that they partnered with the worst carrier. There STILL is no GSM variant in the US and its hard to find imported GSM versions (as opposed to Nokia where you can buy any of their models either at the Nokia store or almost any online store).

The big problem in the US is how much power we give to carriers. Everything is launched through a carrier and they dictate when you can release versions that work on other networks.

I'm not very fond of the Pre's slider, but otherwise it is also the superior phone to hold in one's hand.

What they need for me is to implement Exchange server search and to make a better designed hardware implementation. I tell you if they put that OS on something like a Nokia E66 design I would never touch an iPhone again. Also a home screen card would be nice - just a place to glance at your appointments and tasks. But the notifications on it are second to none.

It truly takes the "iPhone revolution" to the next level. Nobody has even come close to that yet, not Google/HTC/SE/Nokia.

It would truly sadden me if anything were to happen to Palm. It wold also reinforce my belief that American consumers would not know a good thing if it bit them in the ass. They only go for hype and marketing. PT Barnum was right.

RE: Out
By DCstewieG on 3/1/2010 11:10:58 AM , Rating: 2
It reacts and responds to user input as well as the iPhone.

As a Pre and iPod Touch, no it doesn't. When I use the iPod, it's easy to forget nothing is physically moving. The instant response and smoothness of scrolling is amazing. The Pre has neither of those, which is especially disappointing since its hardware is better than my 1st gen Touch.

"I f***ing cannot play Halo 2 multiplayer. I cannot do it." -- Bungie Technical Lead Chris Butcher

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