Disappointing Palm Sales Put Spotlight On Upcoming WebOS Update
While the loss was greatly reduced from the $506.2-million loss the mobile device maker reported in the same quarter last year, observers cited a 29 percent drop in the sell-through rate of the company's Pre and Pixi smart phones as evidence of the company's weak market position.
Palm, once the leading PDA supplier, has fallen behind such competitors as Apple's iPhone and Research In Motion's Blackberry in the smart phone arena. New mobile devices from HTC, Motorola and Samsung that use Google's Android operating system are adding to the competition.
In an effort to catch up Palm earlier this year debuted the Pre, based on the company's new WebOS software, that's sold exclusively through Sprint Nextel. That was followed up by the company's new Pixi device in October.
While Palm said it shipped 783,000 smart phones during the second quarter, the company reported sell-through of 573,000 units, a number that industry analysts expected to be around 600,000 units, according to a story in The Wall Street Journal.
Palm is promising an important update for WebOS at next month's Consumer Electronics Show in Las Vegas, a move that could prove critical to future demand for the Palm and Pixi. Analysts have said that Palm's slow rollout of a software developer kit for building third-party WebOS applications is one reason Palm and Pixi sales haven't met expectations.
For the three months ended Nov. 30 Palm reported sales of $78.1 million, down almost 60 percent from sales of $191 .6 million in the same period in 2008.