Palm said Thursday it expects revenues will fall well below the company’s previously forecast range of $1.6 billion to $1.8 billion for the current business year. The smartphone maker attributed the anticipated decline to slower than expected consumer adoption of the company’s products, which has led to lower order volumes from carriers as well as the deferral of future orders to later periods.
“Driving broad consumer adoption of Palm products is taking longer than we anticipated,” said Palm CEO Jon Rubinstein. “Our carrier partners remain committed, and we are working closely with them to increase awareness and drive sales of our differentiated Palm products.”
Building the Ecosystem
Gartner always said it was a bold, but risky, move for Palm to move to its new smartphone platform, called webOS, noted Roberta Cozza, a principal analyst at the research firm. She thinks the biggest challenge Palm now faces is building a competitive ecosystem around webOS.
“What makes or beaks a platform is how appealing it is for consumers,” Cozza said. “I think the reason it is getting more difficult for Palm comes down to the fact that when consumers buy a phone they are more aware of the supporting ecosystem — which apps are available that will do what they want them to do.”
Apple’s App Store and the Android Market each offer a diversity of third-party apps that make these ecosystems highly attractive to consumers, whereas webOS only has Palm as a vendor. So platforms like Android are a better proposition for developers, Cozza noted. “The problem Palm will have going forward is to attract more developers,” she said.
Moreover, Android has many manufacturers globally, while Palm is just one manufacturer with strength in only one region — North America. According to Gartner, Palm held a 4.3 percent market share in North America at…