“Palm Inc. warned that revenue for the current quarter would be far below Wall Street’s expectations, after tepid demand for its smartphones left wireless carriers with piles of excess inventory,” Gabriel Madway reports for Reuters. “The company’s shares fell 14 percent in after-hours trading on Thursday. Taking into account Thursday’s after-hours losses, Palm will have lost half its market value since the year began.”
MacDailyNews Take:
Madway reports, “Palm executives told analysts on a conference call that fourth-quarter revenue will be less than $150 million… Analysts had been expecting revenue of about $306 million, according to Thomson Reuters I/B/E/S.”
MacDailyNews Take:
Madway continues, “The company shipped a total of 960,000 smartphones during the third quarter ended February 26, but sell-through — which reflects how many devices actually end up in consumers’ hands — totaled 408,000 units, lagging the 600,000 units or more many analysts expected.”
MacDailyNews Take: That’s a lot of inventory collecting dust, Jon. Oh, almost forgot:
Madway continues, “For the current quarter, Palm also forecast a gross margin in the mid-teens compared with a Wall Street estimate of 26 percent.”
MacDailyNews Take:
Madway continues, “Avian Securities analyst Matt Thornton expects Palm to be acquired or taken private… Last month, the company slashed its third-quarter and full-year revenue targets on slower than expected consumer adoption… ‘Our recent underperformance has been extremely disappointing to me personally,’ Chief Executive Jon Rubinstein said on a conference call with analysts.”
Full article here.
StreetInsider reports, “An analyst at Morgan Joseph downgraded shares of Palm ( PALM) to ‘Sell’ this morning, also slapping on a big fat $0 price target.”
MacDailyNews Take:
StreetInsider reports, “Following last night’s weak Q3 results and concerning outlook (and the resulting 9% drop in the stock), the firm believes that Palm’s ‘death spiral is accelerating.’ Morgan Joseph said it is doubtful about Palm’s survival.”
Full article here.
John Paczkowski reports for AllThingsD, “A handful of research notes on the company were issued this morning and they are, to a one, viciously negative. The headlines: Palm’s brand value has collapsed; its financial performance is a disaster; and its execution missteps in a business as competitive as the mobile market have left its future prospects dubious.”
MacDailyNews Take:
Paczkowski continues, “Over at Canaccord Adams, Peter Misek essentially threw in the towel on the company: ‘We believe that Palm’s troubles will only accelerate as carriers and suppliers increasingly question the company’s solvency and withdraw their support,’ he wrote. ‘With what appears to us to be roughly 12 months of cash on hand, an accelerating burn rate, a complete lack of earnings visibility, and substantial debt and preferred equity, we no longer see any value in the company’s common equity. As such, we are reiterating our SELL recommendation and reducing our target to US$0.00 (previously US$4.00).'”
Full article here.
MacDailyNews Take: It doesn’t seem so easy now, does it, Jon?
Here are some fun quotes we’ve iCal’ed:
• We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in. – Palm CEO Ed Colligan, November 20, 2006
• Why would we price ‘Pre’ less than iPhone when we have a significantly better product? – Palm CEO Ed Colligan, January 10, 2009
• June 29, 2009 is the two-year anniversary of the first shipment of the iPhone. Not one of those people will still be using an iPhone a month later. – Palm backer Roger McNamee, March 05, 2009
• If you’re buying (Palm shares) now, definitely what you’re looking at is that they’re going to have the most valuable asset in the industry. At some point, somebody will want to pay a premium for that. From a products perspective, the impact on the market is probably as important as iPhone. – Pacific Crest analyst James Faucette, June 03, 2009
• No comment. – Palm spokesman Derick Mains on the future of the company, March 10, 2010
[Thanks to MacDailyNews Readers “Fred Mertz” and “Mike C.” for the heads up.]
Rubinstein moving to Adobe
Two things Palm shouldn’t have done that have led to its demise:
1) Make an exclusive deal with Sprint.
2) “Steal” iTunes connectivity (which, in my view, sucked any credibility this company had left).
Steve Jobs probably takes it pretty easy on that new liver, but I wouldn’t be surprised if he toasts at least one glass of wine to the death of this rudderless company.
Hey, MDN, I like the graphics!
So given the graphics included in this article should we assume that Steve Jobs is the Adam West to Jon Rubinstein’s Cesar Romero?
Great images – – classic.
MDN, thanks for the ‘clank/splat’ pictures, now I can use them in emails etc., along with my others.
actually it’s kinda sad :(. DON’T get me wrong, I love my iPhone (had all 3) and even MobileMe etc…. But I do like Palm MUCH better than some of the others (Droid, any Windows Mobile phone) and let’s face there will always be others on the market.
Palm is more like Julie Newmar
If they do die, it will be sad to see an American iconic company fail.
But, I do not like the hubris they had such a short time ago.
Should have been more modest and instead show it on the field.
Comic Book takes on a once great company.
How apropos.
Rubinstein as the joker because his leadership and hardware were a joke.
LMAO!!! Best. Take. Ever.
MDN – you forgot to say “BOOM!” in one of your graphical takes
My oh my, Roger MacNamee’s awful quiet these days…..
So the SEC is Neil Hamilton?
Apple should buy the patents and give the money to the share holders
What will the company be worth if they meet the target price
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When the iPad crushes the Netbook sales, which is the only real growth in the Windows PC market, the PC box makers will also crash.
And how about the cloud services when Apple’s BILLION DOLLAR SERVER FARM is on line. Apple will take that market too!
“MDN – you forgot to say “BOOM!” in one of your graphical takes”
No, “BOOM!” should be reserved for Mr. Jobs exclusively.
@ Hotinplaya…
I agree totally. Palm does hold some terific IP which Gogle does not need to get a hold of. Apple would dissect out the true diamonds in and harness them to our benefit.
I don’t understand the sadistic satisfaction with another company closing.
Rubenstein says he is personally disappointed at the performance, but obviously not so much that he take responsibility, and resign??
“We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in. – Palm CEO Ed Colligan, November 20, 2006”
Uh, apparently some PC guys do figure it out aka Steve Jobs & Apple iPhone and other PC guys don’t aka Jon Rubinstein & Palm.
“I don’t understand the sadistic satisfaction with another company closing.”
Answer: “History dear boy, history. Study it or be resigned to repeat it…”
“I don’t understand the sadistic satisfaction with another company closing.”
I don’t understand the sadistic behavior of another company leeching iTunes, hacking hardware to fool iTunes that its an iPod, the pompous arrogant attitude of Palm Leaders dissing a company that they clearly copied from and hacked their way to iTunes.
I hope you understand that.
The third thing they shouldn’t have done is make such a sucky phone.
@MidWest Mac
Yes- the Sprint deal wasn’t the right choice- they should have started out with Verizon— there were/are a great number people frustrated with AT&T;including myself. To be honest; If the Pre’ was Verizon- I might have jumped the fence. Maybe.
Leaching off iTunes was just plain STUPID. Talk about lazy. Totally bad PR.
Being late with the SDK was another problem.
Truth be told- WebOS is actually pretty slick with a lot of potential. Palm’s biggest problem started from the top. They are where they were destined to be.
Sad, to see Palm go. But, they have had so many missed opportunities over the years that it’s really not a big surprise. Palm Bought the company that had acquired BeOS but Palm missed the mark and instead of leveraging a Great Unix Based OS for their devices they sold the BeOS to someone else and instead turned to WinMO for their Mobile OS needs. Strike One! They also bought Hand Spring to get rid of the biggest competitor, while they used some of the Handspring designs and technologies they let the most talented people at Handspring slip away because they were trying to maximize profits and not taking care of the employees. Strike Two! The Company claiming that the Pre was an iPhone killer and all iPhone users would switch to the Pre was so far fetched that anything the company said after that was regarded by the public at large as a bit of marketing smoke being blown up their bum. Fouled!! down the left baseline, hitting the third base coaches on the head, he’s out cold! Palm rushed out the Web OS and frankly it’s unfinished even to this day, because they need to compete with Apple’s iPhone but Palm lacks the resources to complete Web OS, Palm also rushed the hardware design and went with less then 100% quality control to keep the manufacturing costs as low as possible and as a result the Palm devices are not very good. Palm at the same time destroyed their credibility by instituting cheap tricks and blaming Apple for their inability to sync with iTunes music content. As a result the Pre has not method to but iTunes music content in the Palm devices seamlessly and for their poor build quality. Strike Three.
All those people who were quoted, should stand in a row and be bitch slapped down the line.
As has been said before, McNamee was a little bit right in that w/in 30 days of 06/29/09 I was no longer using my original iPhone as a phone — I upgraded to the 3GS, and now my original iPhone is a nice iPod touch.
Jubei:
You got that right.
that, once upon a time, way back in January of aught nine, there was this company that had a piece of vaporware that wasn’t actually on display, but was voted the best product of all at the Consumer Electronics Show. I think it was going to replace everything. Your phone, your toaster, your sunglasses. All you were going to need to subsist in life was one of these devices.
Amazing what the passage of time will do, isn’t it?
RE: We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in. – Palm CEO Ed Colligan, November 20, 2006
You have to admit, Ed was right!!
Jon, being a PC guy, did not just walk in and figure it out.
@Demon
Good points- I forgot about BeOS. I still think WebOS from a potential standpoint was a good fit for the Pre’. It wasn’t complete and if the Palm brass stopped with the “iPhone killer” crap- the expectations wouldn’t have been so high allowing for growth without the perception of failure. At the end of the day- Palm killed Palm.
…”and now my original iPhone is a nice iPod touch.”
Why not sell it on eBay, get a brand new iPod touch and use the left-over money to fill the thing with music? Even the oldest original iPhones fetch $230-250 on eBay (for a 8GB model). Brand new touch is $200 (less with educational discount), refurbs start at $170.
Sorry Palm. I liked your stuff but you turned from being an innovator to being a half talent me-too. The bravado was a turn-off, and a poor attempt at parity with the other industry players. If a half wit like me can see that, I wonder why the Palm suits at the company’s helm couldn’t. Good luck at the assets auction.
Palm WebOS is still much much much better than Android, WinMo 7, Samsung Bada, Symbian, MeeGo, Blackberry OS, BREW, etc… so it would be a shame to see it disappear. The mobile industry would be much more competitive and interesting if WebOS appeared on other brands, such as Motorola, Nokia, LG, Samsung, etc…
right about now, RBC analyst Mike Abramsky should be upping Palm’s target price to $50. ha ha
@ Mike Johnson Jobs,
Whatever, I can’t comment on how good WebOS is or is not, as I’ve heard both…
BUT, the point is, it CANNOT be successful in the market for a variety of reasons:
1) it will forever be tainted as a failed Palm OS product.
2) if it ever were to gain market traction, Apple would sue because of its patent infringing. Seriously. HTC is first, but Palm would be next, particularly after a successful result against HTC.
3) potential buyers of the Palm WebOS technology fear being sued by Apple for potential patent violations by Palm and its OS.
4) the reason Apple has not acted against Palm so far, is because of reasons 1-3.
We might take a little less joy in one company’s failure when we realize there are real people, with real families, who will soon be jobless.
Good comments, other than those who take satisfaction in Palm dying. I find that MDN “people”, and the Editor himself, are just insensitive nerds who exist outside of reality.
Taking pleasure in the suffering of others? Nice. When cancer lands on your body, we can all laugh at you. Only then will you realize just how out of touch you really were.
Anyway, another thing to add to all this… the Palm Pre is really the only other smartphone I would buy and use besides the iPhone. The fit and finish of the WebOS is excellent. In certain ways it is better than the iPhone, in terms of look and functionality. What would have helped put it on the map more would have been two things: 1. no physical keyboard, so the device could be made thinner and the screen bigger. 2. faster. It’s way too slow from reports. 3. less buggy. The bugs are causing problems for networks.
But with the death of the PDA market years past, and the fact that other smartphone makers flooded the market and took away significantly from Palm’s smartphone shares, perhaps Palm really was living on borrowed time…
This would be an *excellent* time for Apple to file a suit against Palm for infringing on Apple’s patents. Seek an injunction banning the sale of their units pending the outcome of a trial. Even if Apple never gets it, Palm will bleed to death on the legal fees and blow through it’s cash on hand even faster. Then snap up the patents for even cheaper or as part of a negotiation.
“Taking pleasure in the suffering of others? Nice. When cancer lands on your body, we can all laugh at you. Only then will you realize just how out of touch you really were.”
Wow.
Did you miss the quotes from Ed Colligan and Roger McNamee saying the Pre would slay the iPhone? Did you miss where Palm violated the rules of the USB Forum and hacked its way into iTunes because it was too lazy to write its own sync software? Did you miss where the Pre was absurdly defective, and yet knowing this(it’s impossible they couldn’t have), they decided to sell it anyway?
If there’s any justice in the world, people should take pleasure in Palm’s suffering. There should be accountability for their hubris and the promises they couldn’t even vaguely deliver. A little schadenfreude is the least they deserve for hideously failing their shareholders.
I guess you’d prefer zero accountability, though, eh? I suppose you want arrogant, incompetent CEOs like Ed Colligan to be forgiven whenever they ruin a company, freeing them to move on to and ruin the next one? That certainly seems to be the status quo.
And you compare making fun of Palm’s self-immolation with making fun of a cancer patient? Before you accuse other people of being disconnected from reality, start with yourself.
Palm treated Apple and the Mac market for years as, at best, a hind tit.
Companies ignore Apple and its customers at their own peril. Beware the rest of you corporate asses…
Holy knock-off knock-out, Batman!
NOBODY is making fun of the poor peon level people who are losing their jobs. Our (my) sincere best wishes go out to them all.
That said, the executives who were in charge that ran the company into the ground by making a buttload of mistakes, including failure to utilize BEOS, and not taking Apple seriously just cause they had an x-apple guy, and mocking apple, all the time spouting rubbish like in June 2009 not a single person will be using an iPhone…… Well, they deserve what they aregetting and will get as the stock price plummets towards $0.00
Apple always hypes their products, but they have NEVER said that after this device comes out, no one will be using devicexxx.
They simply do their best, and let the end user decide. Oh yeah, this Apple faithful $41t has to stop…… The 90s holdout die hard Apple buying people are so far in the minority with all the new users, that idiot ‘journalists’ and ‘tech analystas’ who constantly predict that “Apples new ______ may find a home among the Apple faithful, but no one else will be buying it” should be drug out, and executed gangland style.
Don’t see what joy is in seeing a once great American company bite the dust, to be replaced by some Chinese assember that simply steals all IP.
Guys, get a grip! You start to look like…
@ MDN: How could you forget “ZONK!!!”?
Just sayin’.
Peace.
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Olmecmystic
P.S. Palm, you f&#ked;up when you had to put Windoze on your products because you were too lazy to keep your own Palm OS up to date. Now you’ve gone from complacent to irrelevant. Oops! We hardly knew ya.
@predrag
could eBay my 1st gen iPhone , but this way my kid has an iPod touch with camera
@Don
>Companies ignore Apple and its customers at their own peril. Beware the rest of you corporate asses…
Amen to that brother! Ever since Apple jumped the fence of their self imposed ghetto in the late nineties, they’ve done nothing but kick ass and take names. Let’s face it, the only reason the iPod exist today is because ALL of the players at the time dissed Steve’s shiny new OS. Had ANY of them written decent apps and drivers for OsX, Mr. Steve would had but their corporate names and faces front and center of Apple’s webpage…none of them did. The rest as they say, is history…
@ self
…then again all some of us need to do is learn to proof read LOL!
Go Apple!
Now is the time to buy Palm shares.