Beleaguered Palm “reported its fiscal first-quarter loss nearly quadrupled because it deferred much of the revenue from Pre sales — projected lower sales in the current period than Wall Street expected. Analysts cited factors that include stiff competition as well as a limited number of sales partners among carriers,” Yukari Iwatani Kane and Roger Cheng report for The Wall Street Journal.
“The latest quarter, which ended Aug. 28, was the first full period to reflect sales of the Pre, which was launched June 6 and is based on a new operating system called webOS. Analysts consider the device to be a make-or-break product as the unprofitable company battles rivals such as BlackBerry maker Research In Motion Ltd. and iPhone manufacturer Apple Inc.,” Kane and Cheng report.
“Palm didn’t break out sales figures for the device, but said it shipped 823,000 smart phones during the quarter, down 30% from a year earlier but more than double the number in the prior period,” Kane and Cheng report. “Analysts estimate the company sold about 500,000 Pre units in the first quarter, about in line or slightly lower than what many had expected.”
MacDailyNews Note: Apple sold over one million iPhone 3GS units in its first 3 days of availability (June 19-21).
Kane and Cheng report, “Palm books revenue from the Pre over 24 months, the estimated period of use for the device. Without that revenue deferral, the company’s loss was narrower than Wall Street expected. But Palm said it expected revenue in the current quarter to be between $240 million and $270 million, compared with Wall Street expectations of about $344 million.”
“‘The weaker projection suggests the momentum for the Pre is turning down,’ said Ilya Grozovsky, an analyst at Morgan Joseph,” Kane and Cheng report. “Palm’s U.S. sales partner has been Sprint Nextel Corp.; earlier this month, Palm cut the Pre’s price by $50 to $149.99 with a two-year service agreement with the carrier.”
Kane and Cheng report, “Apple reported a quadrupling of iPhone revenue in its third quarter ended June 27.”
“For the quarter, Palm reported a loss of $164.5 million, or $1.17 a share, compared with a loss of $41.9 million, or 39 cents a share, a year earlier. Palm also said Thursday it planned to sell 16 million shares of common stock, in a move to bolster its cash reserves, which were $211.8 million at the end of August. Palm shares fell 3% to $14.01 in after-hours trading.,” Kane and Cheng report. “‘They’re doing it because they need the money,’ said Ed Snyder, an analyst at Charter Equity Research. ‘That’s not good.'”
Full article here.
Apple sold over one million iPhone 3GS units in its first 3 days of .. blah, blah, blah. The iPhone is the best smartphone out right now. The Pre is not a bad phone. I was hoping it would kick some ass because lord knows that Apple needs some competition. I’m sure Apple has some sick shit sitting in their labs that they won’t release because they don’t have too.
The main competition Apple has are customers who will buy “looks like” and “good enough” products. Not companies that have similar phones to the iPhone that’s not remotely close to happening even in the next few years.
djmactech,
You make me extra sleepy. Please explain how Apple created the iPhone in the first place?
Apple competes with themselves. They don’t need a bunch of castoffs and losers trying to resuscitate a dying derivative company that, without Apple’s Newton, wouldn’t even exist.
djmactech doesn’t think things through very well.
Must’ve voted for Obama.
No the Pre is a bad phone. it is cheaply constructed, scratches and breaks easily (an estimated 30% failure rate already and only 1 qtr in, no telling how big that will be in a year, the term that failure rates are normally calculated)
It has considerable software problems (yes an order of magnitude worse than the original iPhone) and the SDK is almost unusable.
Yes the iPhone need a competitor (right now it is like Michael Jordan playing one on one against high school kids) but the pre is just not it. Hopefully Android will be able to mature, because the “previews” of win mobile version 7 are not encouraging.
Who knows perhaps one of the new open source OS’s will step up to the plate (Haiku maybe, I always though it was a shame MS was permitted to strangle BeOS, it would have been a wicked cool OS for net-books and possibly even mobile phones.
@ Julia,
YOU LIE !!!
“the momentum for the Pre is turning down”. Really? Didn’t realize it had any! Come to think of it, I have yet to see a Pre, let alone a Zune
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What were Palm’s sells the previous quarter? How is this not a major improvement? Also, the Pre was only sold in the US during that quarter, after the Canadian and European numbers of the Pre are tallied, your jaw will drop!
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@ Uncle Fester’s cousin,
Haiku? No offense meant, but good grief, this is the 21st century.
That ancient looking thing might appeal to mentally challenged knuckle-draggers like ‘Julia’, but for normal people that’s a step backwards; like the Bush administration.
@Tired of Retards, ” explain how Apple created the iPhone in the first place?” What the hell are YOU talking about? Read my comments again, slowly, so that you can understand my comment, retard. Julia, you’re just an idiot. stupid comment, really. You must have voted for McCain.
11 million iPhones this quarter, and 60 million+ 2010. Good luck to everyone else. You can take the three other top “smartphone” builders combined profit and that won’t equal Apple’s. Great product, great user experience and then control the RAM market and you will get complete and udder dominance. And before all you morons tell me how small Apple’s over all market is listen, Apple’s margins are what is important and their margins are going to be close to 38% this quarter, if not higher. Thank you for playing.
Birdbath!
@Mormegll
I saw a person with a Pre once. He was having trouble using it to find the closest Dollar Store. I almost had pity on him and was going to use my iPhone’s Maps app to help him out, but then I thought, “Why rub it in?”
@ Britney’s Pregnant Sister™
“Birdbath!”
It should have been called the Palm Pre Death Knell.
Let hope the Zune HD came out of the same factory as the brittle Pre!
@ Sir Gill Bates
Haiku is in Alpha, the look of UI is not the most important thing at this point. It may be designed for small devices, so they do not want to eat up a lot of storage space with unnecessary, but pretty UI code. Another thought is most Win users are still on XP, and some, like my old job, are made to look like NT. Haiku will be more familiar and comfortable to those users than 7 or SL. Change is scary and bad.
On topic Palm better make some changes fast. I don’t think anyone will be willing to buy them, the mobile OS market is saturated now. Unlike Palm Google and MS do not have to make money to keep theirs going, yet. Getting tied to Sprint was their first mistake, if you think AT&T;coverage and customer service sucks then you should try Sprint.
@ Sarasota too,
You’re right, good thinking. Thanks.
@ twilightmoon
> The main competition Apple has are customers who will buy “looks like” and “good enough” products.
Actually, I think the “main competition” (as you have defined it) are customers who do not want ATT as the wireless provider. iPhone exclusivity (with ATT) is the best thing Apple’s mobile phone competition have going for them right now. iPhone would be even more dominating, if Apple made a version for Verizon (assuming Verizon could bring itself to agree to Apple’s terms).
These Federal regulators investigating the exclusivity had better understand what they are unleashing, if Apple is “forced” to offer the iPhone with other carriers. I think Apple wants the strong and predictable growth, and reduced operating expenses, from working with just one exclusive carrier in most markets, at least for now. But I’m sure they have plans in place, and even CDMA prototypes, if there was an earlier than anticipated need to expand beyond the exclusive arrangement.
djmactech You must have voted for McCain.
Half the country voted for McCain.
Or against Obama, take your pick.
While being sworn in, Obama’s popularity was nearly unprecedented. Now, not so much..
The mid term elections will be very interesting to watch.
I think Apple’s best bet would to be to create an iPhone for every carrier other than Verizon, and make it completely hardware incompatible with Verizons’ CDMA network.
Really put the screws to Verizon.
One thing is certain. Julia voted out of her ass.
jake
Clearly anyone that does not subscribe to a particular political ideology is talking out of their ass, because we all know there is
Only One True Way To Think™
God forbid people ever learn to think independently, can’t have that.
Beleaguered Palm, covered with oozing pustules and stinking of vomit, staggers through the doorway and suffers a fatal brain aneurysm.
I love my Palm TX PDA but I also love to watch Palm flounder, struggle and ultimately die.