Any buyers?
Smartphone maker Palm has issued guidance ahead of its quarterly earnings announcement, warning that it expects revenue to be around $300 million. Expectations were in the region of $420 million and, as a result, its shares dropped by almost 20 percent.
Palm looked to have revived its fortunes when it launched the Pre at CES 2009. Not only did it have a top hardware spec at the time, including a TI OMAP 3430 SoC, it also ran Palm's own operating system - webOS - and a communication aggregation platform - synergy - of the kind that has become commonplace on subsequent smartphones.
The Pre was arguably one of the most talked-about launches of CES 2009, and initial signs were positive for its sales. Over the course of 2009, however, a flood of high-end smartphones have hit the market and it's been difficult for Palm to keep that buzz going. Yesterday's announcement confirms that sales have disappointed.
"Palm webOS is recognized as a ground-breaking platform that enables one of the best smartphone experiences available today, and our work to evolve the platform and bring industry-leading technology to market continues," said Jon Rubinstein, Palm chairman and CEO.
"However, driving broad consumer adoption of Palm products is taking longer than we anticipated. Our carrier partners remain committed, and we are working closely with them to increase awareness and drive sales of our differentiated Palm products."
As Rubinstein said, the Pre and its little sibling the Pixie still have plenty to offer, but the challenge is maintaining awareness in the savagely competitive smartphone market. Perhaps now is the time for someone to buy Palm.
Microsoft has long been rumoured as a potential suitor, but after the launch of Windows Phone 7 we think that's unlikely. If anyone is going to buy Palm, it makes most strategic sense for it to be a PC OEM that is struggling to break into the smartphone market. In other words, HP or Dell.
