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Palm Turns To Palm Pre For Salvation

Company hopes the upcoming release of its new smartphone will help it break out of financial turmoil.

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In preliminary results, Palm said it likely will report revenue for the third fiscal quarter of 2009 of somewhere between $85 million and $90 million, a massive drop from the $312.1 million in revenue it reported in the third quarter of 2008 and the $191.6 million it reported in 2009's second fiscal quarter. Palm's success in the third quarter for 2008 was mainly due to huge uptake of the Palm Centro smartphone, which planted the seeds for a Palm comeback.

Palm chalked up the expected loss to "reduced demand for Palm's maturing legacy smartphone products, the challenging economic environment and later-than-expected shipments of the Treo Pro in the United States."

Palm added that it expects revenue to continue to decline in the fourth fiscal quarter, as well.

Despite the revenue drop, Palm said it hopes the release of the highly anticipated Palm Pre smartphone will help it bounce back when it's released later this year.

"The much-anticipated launch of the Palm Pre remains on track for the first half of the calendar year 2009, but as expected we've got a difficult transition period to work through" said Palm President and CEO Ed Colligan in a statement. "Despite the challenging market environment, the extraordinary response to the Palm Pre and the new Palm webOS reaffirms our confidence in our long-term prospects and our ability to re-establish Palm as the leading innovator in the growing smartphone market."

Palm officially unveiled the Pre and the new webOS in January, making the Pre one of the hottest devices unveiled at CES 2009 in Las Vegas. The Palm Pre is Palm's answer to the now-iconic Apple iPhone 3G and other touch-screen titans like the BlackBerry Storm from Research In Motion and the Google Android-based T-Mobile G1.

The Pre, a small and slick smartphone, represents the first Palm device to run the new webOS operating system. The 3G device offers a large 3.1-inch touch screen with a full slide-out QWERTY keyboard. The device also uses Palm Synergy, which converges contacts into a single address book from various sources such as Gmail, Outlook and Facebook. Another cornerstone of the Pre is the ability to run several applications simultaneously, without making users log out of one application to work in another.

The Pre, which will be exclusive to Sprint upon its launch, ties together Wi-Fi, GPS, 8 GB of memory and a 3.1-megapixel camera with an LED flash.

Palm has not yet revealed the pricing and specific release date for the Palm Pre.

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