Palm sees smart-phone opportunity slip through fingers

25 Feb 2010

Palm’s gamble on its innovative Palm Pre smart phone doesn’t appear to have produced the results the company had hoped. The company’s Q3 revenues are being impacted by “slower than expected” consumer adoption.

The company said it expects revenues for the third quarter to be less than US$310, which means the company will struggle to reach the US$1.6 billion to US$1.8 billion year-end target for May that it had originally forecast.

The company admitted this in a guidance note for investors today.

It said that it expects revenues for Q3 to be in the range of US$300 million to US$310 million.

“Revenues for the quarter and full year are being impacted by slower than expected consumer adoption of the company’s products that has resulted in lower than expected order volumes from carriers and the deferral of orders to future periods.

“Accordingly Palm expects fiscal year 2010 revenues to be well below its previously forecasted range of US$1.6 billion to US£1.8 billion.”

While the Palm Pre launched to rave reviews and critical acclaim, the device has had to compete in what has been an increasingly competitive marketplace dominated by devices like the Apple iPhone, the RIM BlackBerry, devices from Samsung and a growing array of Google Android-based devices.

Palm’s troubles are less to do with innovation and more to do with timing. If the device had launched one year earlier it would perhaps have had a far more disruptive effect on the marketplace.

You could say Palm put all its eggs in one basket but failed to upset the Apple cart.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years