Palm reported $349.6 million in revenue and a $9.6 million loss for the company’s second quarter. By contrast, the handset-maker generated $392.91 million in revenue and a $12.77 million profit in the year-earlier period.
CEO Ed Colligan attributed Palm’s underwhelming financial performance to an unanticipated delay in delivering the company’s Treo 755p smartphone to Verizon Wireless. “The time required to run every quality issue to ground” prior to the smartphone’s release “pushed delivery of the product out of the quarter and was the primary reason we did not meet our revenue expectations,” Colligan said.
Palm currently has a relatively narrow smartphone product lineup, which is likely why a single miss with one carrier had such a measurable impact on the company’s bottom line. “There’s definitely lost business when you fail to ship during the holiday season,” Colligan said. “We have to build a broader array of products so one miss does not have such a big effect.”
Centro’s Record Sell-Through
Colligan blamed the snafu on the venerable Palm OS, which is slated for a major upgrade within the next six months. “We have an older operating system here that sometimes is challenged in certain situations relative to network performance issues,” Colligan noted. “We have to get to the next-generation operating system,” he said.
Despite the setback, Palm’s quarterly smartphone sales rose by 11 percent year-over-year to 686,000 units — driven by the popularity of the company’s new Centro handset, which achieved sell-through rates in excess of any cell phone Palm has delivered in the past.
“And as we expand distribution with a wider range of partners this quarter we expect those sell-through rates to expand significantly,” Colligan said.
On the other hand, Palm’s CEO admitted that the popularity of the company’s low-cost smartphone had eaten into sales of its higher-priced Treo handsets. “At…