Print 97 comment(s) - last by Ichinisan.. on May 2 at 7:44 PM

Palm reportedly has 1.5 million unsold Palm Pre and Pixi units. It has halted sales, a sign of the company's deep problems.  (Source: Palm via VentureBeat)
Bad news continues for veteran mobile device maker

Palm, maker of the Pre and Pixi smartphones, is facing desperate times.

American Banking News
 has reported that Palm's production halt continues as it is unable to sell the stockpile of webOS handsets it has built up.  There's no official word from Palm, but the announcement seems likely to be true as Palm stock plunged 30 percent to around $4 a share following the news.

Palm has a rich history and helped to launch the PDA and smartphone movements.  Lately, it has struggled to keep up with Apple iPhone and Research in Motion Blackberry smartphones.  And smartphones have largely killed the market for PDAs, so Palm can no longer seek refuge in that market. 

In 2008, Palm saw the writing on the wall and made an ambitious bid to retake the market.  After much investment, it unveiled webOS, its new smartphone operating system.  In June 2009, the Palm Pre launched on Sprint, America's third largest wireless carrier.  

Commentary on the smartphone and its OS was mixed, but overall was somewhat positive.  The interface was much like the iPhone, but it lacked the iPhone's extensive app library and used slower interpreted code for apps (as opposed to native code).  Perks, though, included multitasking and a physical keyboard.

Since the launch of the Pre, Palm has done its best to beef up its offerings, releasing the cheaper Palm Pixi handset and the Palm Pre Plus on Verizon, the nation's largest network (Sprint was the first to get the Pixi).  It also released a new software development kit that allowed native application code via the Simple Direct MediaLayer.  The results were impressive -- Palm devs were able to quickly port both Doom and Quake to the phone, a feat impossible with interpreted code.

For all that effort, Palm's sales continued to slip as it saw Apple and RIM post gains.  People simply didn't seem interested in the Palm handsets.  

Over The Air
 in February reported that Palm had shut down its production of webOS handsets.  Palm claimed at the time that the shutdown was temporary -- just a closure for the Chinese New Year.

Now it appears that the shutdown was not just for the holidays.  Palm's poor sales, showcased by its miserable Q1 2010 calendar quarter (its fiscal Q3 2010), are catching up to it and it is developing a large overstock of webOS phones.  According to Morgan Stanley Analyst Ehud Geldblum, Palm this quarter produced 960,000 phones, but amazingly has only sold 408,000 of them.  The total overstock is estimated to be 1.5 million units, following a 29 percent drop in sales in the first quarter of this year, which ends at the end of this month.  Palm's revenue has reportedly dropped $22M USD over the current quarter.

To put Palm's unfortunate failure in context, Google's Android sold 5.5 million units in Q4 2009 and Apple moved 7.5 million iPhones.  That means that Palm's sales for entire quarter are approximately the number of units Apple or Google sell in a single week.

Even if Palm was incredibly able to continue the sales pace of its Pre and Pixi (which is perhaps possible given its new Verizon contact), it would take nearly a year before it could sell off its stock.  By then new Android handsets would have arrived, a new iPhone, and Windows Mobile 7 -- all while Palm is stuck trying to unload increasingly dated handsets.

Palm will likely be forced to turn to deep discounting.  At first blush this might seem happy news for the consumer, but ultimately it is 
not a good thing as it will hurt Palm badly, which in turn will hurt Palm's ability to promote a successful app market for consumers.

Despite all the bad news surrounding Palm these days, there was a bit of good news for the company today. AT&T announced that both the Pre Plus and the Pixi Plus will be heading to its network “soon”.


Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: What I would do...
By Tony Swash on 3/23/2010 10:36:28 AM , Rating: -1
What I find striking on this forum, as well on some other similar technology and OS forums, is that the people who don't like the Apple products spend so much time insulting the individuals who buy (and seem to like) Apple kit.

Disagreeing with someone about how useful/economical/attractive/preferable/functional a piece of tech kit is, is good, it leads to healthy debate which people find useful in clarifying their own purchase plans, you can learn stuff from it. Expressing such disagreements strongly and with forceful language is also OK.

But why insult people? Why claim that anyone buying Apple kit is an idiot or a fool. I intensely dislike both Windows and Microsoft as a company but I would never claim someone buying a Microsoft product was an idiot or an asshole. Recently a friend of mine who hates all things technological and who has only ever used his ancient Windows PC to surf the web and send emails using Outlook wanted to replace his computer. He asked me about possibly switching to Mac and we went together to the Apple Store in London and had a good look at what was on offer. In the end he settled on a cheap laptop running Windows 7. This was probably the right choice for him as it does what he wants and for less than a mac would cost and he really doesn't want to explore what else he could do on his computer with photos, or videos or any of that sort of stuff. I would never call him an idiot for picking a cheap Windows laptop - it was the right choice for him and he is happy.

I love digital photography so when I watch Photoshop TV and see Scott Kelby and his team and I note that all these professionals all use Macs. These people are not fools or technical illiterates, they have to make cool headed professional judgements about what kit is the best, most reliable tool for their trade. If one of their guests turns up and uses a Windows laptop they don't sneer, its just someones else's judgements and choice.

If you selected a random bunch of PC/Windows/Android users and compared them to a random bunch of Mac/iPhone users I suspect you would find the same proportion of assholes and idiots in each camp. Most people from either camp would just be normal and pleasant.

It almost as if some people in this forum feel personally threatened by Apples success over the last decade. Why?

RE: What I would do...
By clovell on 3/23/2010 11:53:57 AM , Rating: 5
I think you got under their skin most when you confused storage and RAM, and then refused to say something along the lines, 'Damn, I knew I shouldn't have posted before I finished that first cup of coffee.'

Being an Apple fan probably didn't help you, either.

RE: What I would do...
By Tony Swash on 3/23/10, Rating: 0
RE: What I would do...
By Laereom on 3/28/2010 12:15:31 PM , Rating: 2
I imagine most of them don't have anything against Apple, per must admit that they make a lot of solid, market-changing products. I don't enjoy most of them personally since I like having more control over my gadgets than most, but I can understand others who do.

However, Apple fanboys...

Well, let me put it this way:
Thrice in my life have I met people who confused long term storage with RAM. One was my grandmother. The other two were Apple fanboys claiming their system had 260GB of RAM and cost only $800.

"Well, there may be a reason why they call them 'Mac' trucks! Windows machines will not be trucks." -- Microsoft CEO Steve Ballmer

Latest Headlines
Inspiron Laptops & 2-in-1 PCs
September 25, 2016, 9:00 AM
The Samsung Galaxy S7
September 14, 2016, 6:00 AM
Apple Watch 2 – Coming September 7th
September 3, 2016, 6:30 AM
Apple says “See you on the 7th.”
September 1, 2016, 6:30 AM

Most Popular Articles5 Cases for iPhone 7 and 7 iPhone Plus
September 18, 2016, 10:08 AM
No More Turtlenecks - Try Snakables
September 19, 2016, 7:44 AM
ADHD Diagnosis and Treatment in Children: Problem or Paranoia?
September 19, 2016, 5:30 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM
Automaker Porsche may expand range of Panamera Coupe design.
September 18, 2016, 11:00 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki