With more than half its latest devices left on store shelves at the end of the third quarter, things may be getting out of hand for Palm as the manufacturer struggles to hold market share in the rapidly evolving telecom market.
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The company’s projected fourth-quarter earnings will be about half the $300 million projected by Wall Street analysts. After Palm CEO Jon Rubinstein and CFO Doug Jeffries held a conference call with industry analysts to discuss the bad news, the company’s shares fell 19 percent to $4.08, the lowest level in more than a year, and some advisers urged investors to sell.
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subheadStill Optimistic/subhead
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Our recent underperformance has been extremely disappointing to me personally and the entire Palm team, said Rubinstein in the conference call, according to Bloomberg. We’re very realistic about our near-term challenges, but the issues we’re facing are far from insurmountable.
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Palm said only 408,000 of the 960,000 handsets it shipped in the third quarter ending in January sold, amounting to an $18.5 million loss. That was far less than the $95 million loss during the same period last year. In January, the company introduced updated versions of its Pre and Pixi smartphones with added features and more memory.
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But Palm phones, available through Verizon Wireless and Sprint Nextel, have been losing market share amid a surge by Google’s Android operating system, including the HTC-manufactured Nexus One, sold by Google and T-Mobile, and the Motorola Droid, sold by Verizon.
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According to comScore, Android-based phones have doubled their share of the market to 7.1 percent, while Palm fell from 7.8 percent to 5.7 percent. At the same time, market leaders Research in Motion gained 1.7 percent to 43 percent, and Apple advanced 0.3 percent to 25.1 percent, comScore said.
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subheadBad Marketing?/subhead
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IDC senior research analyst Ramon Llamas sees bad marketing as at least part of…