Palm warned financial analysts this week of a $25 to $30 million revenue decline from previous in-house estimates for the company’s second quarter, which ended on November 30.
The handset-maker said it now expects to post a loss of 8 cents to 10 cents per share for the quarter, excluding one-time charges. The trimmed-back figures surprised Wall Street analysts, who had been anticipating significantly better results in the period leading up to this year’s holiday shopping season.
Palm CEO Ed Colligan attributed the shortfall to an unforeseen delay in shipping out a new product. “We are disappointed that we did not get a key product certified for delivery in the quarter, but we are focused on realizing the long-term benefits and opportunities that inspired our transaction with Elevation Partners,” Colligan said.
To help revive its sagging fortunes, Palm sold a 25 percent interest in the company to the private-equity firm last June. However, analysts note that the product revamp that Palm needs to keep pace with smartphone rivals Research In Motion and Apple has yet to materialize.
Shrinking PDA Market
Although Palm maintained its No. 1 status as the world’s leading PDA vendor by racking up a market share of 44.6 percent in this year’s third quarter, it was little solace given that the nonwireless handheld device market is running out of steam. According to researchers at IDC, third-quarter PDA shipments fell by 39.3 percent year-over-year — the market’s fifteenth consecutive quarter of unit declines. Palm’s PDA shipments fell from 450,000 in the year-earlier period to just 325,000 units.
Palm has not launched a new PDA model for more than two years. And now that its Life Drive has been retired, the company is relying on the popularity of its aging Z22, TX, and Tungsten E2 handhelds to stay…