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Palm Reports Huge 3Q Loss, Puts Hopes On Pre

Palm blames the economy for sales slump.


"We're proceeding through a challenging transitional period, however, our current results shouldn't overshadow the tremendous progress we've made against our strategic goals. We're poised to usher in a new era at Palm," said Ed Colligan, Palm president and chief executive officer.

Palm, Sunnyvale, Calif., said revenue fell to $90.6 million from $312.1 million, very slightly ahead of Palm's March 3 warning that revenue would be in a range of $85 million to $90 million."

Palm also said that it sold a total of 482,000 units of its smartphone devices worth a total of $77.5 million during the quarter, down 42 percent from the number of smartphones it sold a year ago.

Palm's drop in sales comes during a time when smartphone sales in general are slowing.

Earlier this month, analyst firm Gartner said in a report that worldwide smartphone sales in the fourth quarter of 2008 rose 13.9 percent over the same quarter of 2007 to 139.3 million devices, the lowest growth rate it has ever recorded.

Gartner blamed the slowdown in growth on a sluggish economy and a lack of device choices.

Palm is putting much of its hope for a recovery on the expected introduction of its new Palm Pre smartphone.

The Pre, when it is released, is expected to be the first Palm device to run the new webOS operating system. The 3G device includes Wi-Fi, GPS and a 3.1-megapixel camera with an LED flash, and offers a 3.1-inch touch screen with a full slide-out QWERTY keyboard.

The device also uses Palm Synergy, which combines contacts into a single address book from various sources such as Gmail, Outlook and Facebook. The Pre also can run several applications simultaneously without making users log out of one application to work in another.

Palm has not yet revealed the release date or pricing of the Pre, but said it will be exclusive to Sprint upon launch.

Andrew Hickey contributed to this story.

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