Palm cuts guidance numbers

By on Feb 25, 2010 at 10:11 AM
News February 25, 2010

life-preserver PALM

It hurts to be Palm, Inc. right now. After having its stocks rating downgraded earlier this month, the struggling mobile handset maker has cut its guidance numbers due to slower than expected sales and adoption of its mobile products. The news was delivered by Palm in a short an succinct manner:

Palm, Inc. (NASDAQ:PALM) today indicated that it expects that revenues for the third quarter of fiscal year 2010 will be in the range of $285 million to $310 million on a GAAP basis and in the range of $300 million to $320 million on a non-GAAP basis.1 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 $1.6 billion to $1.8 billion. The company will provide more detail on its financial results during Palm’s third-quarter financial results conference call currently scheduled for Thursday, March 18.

Palm predicts Q3 revenue to be somewhere in the area of $300 million; Wall Street analysts were predicting $425 million. The company only said that 2010 revenues would be “well below” the forecasted $1.6 billion. Currently Palm stock is down 17%. Palm coincidentally halted production on their entire line of products, right?

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  • Greed

    Still pushing that false story of halted production I see.. idiot. I believe Palm had an official statement on that one if you recall.

    • Gauntlet Down

      Palm confirmed the production halt.

      And Palm’s words this morning confirm it again (no sell-in now and deferred sell-in much later).

    • Andrew Munchbach

      Do you still think the only reason they halted production was due to the Chinese New Year?

    • amsfan

      harsh words from someone who clearly didn’t read the story or bother to look into this greed. top marks for identifying idiocy.

  • http://www.applebythehour.com Jarrett

    Wait a minute, wait just one God Damn minute. I thought this platform was one of them there iPhone-killers?

    Cheers

    • Sugar Grove

      @Jarrett,
      You’re right every other day their touting an iPhone killer.
      I like to compare the the infastructure from the concept,design, plan,manufacturing and marketing between Apple and the competition.
      On one hand Apple has a history of a huge fan base and on more than one occassion stated that they didn’t want to be the biggest in sales just the best.
      On the other hand you see Dan Hesse in a black and white commercial looking like the cold war days portrayed on Tv.
      I liked the palm when I saw it but the deeper you dig the less it seems to offer. Apples timing was huge in 2007

      • http://www.applebythehour.com Jarrett

        @ Sugar Grove,

        As I stated in a post yesterday, no one in the mobile industry could see the forest because the damn trees where in the way. Apple just did what should and could have been done a very long time ago.
        Palm could have be the #3 or even the #2 here. I don’t know if it was that they decideded against the full screen. Or if it was the portrait only keyboard. I don’t know exactly. Maybe their brand just isn’t big or strong enough to experience explosive growth over a new product.

        Wait, I just figured it out. It wasn’t a new product. Seems to me some people with a “we are great and visionaries also” complex decided to get their own boat and set their own course. Well, we are seeing where that is going.

        Just because you are really smart (smarter than any of us on this here internet) doesn’t mean you are one of the select few in each generation that can shape and mold industries, people, customers and partners.

        Apple got people in with ease of use and counter culture. Steve Jobs ability to see what is next by veiwing what is already out there. No one in business has his sense for what is coming down the pike. In his later years now his business savy is finally maturing.

        Microsoft got people in with Bill Gates ability to offer his product to multiple levels of customers. His genius wasn’t in software or operating systems. Bill’s genius was in business. People always overlook that about Gates. Now, if Bill had been a visionary of even half what Steve is could you imagine how much more wealth he and Microsoft would have realized?

      • Sugar Grove

        Jarrett,
        I hear ya..
        Couple different paths with different objectives.
        Steve is by far one of the best at seeing more than others and capitalizing on that vision. Also one of the best pitchmen I’ve ever seen.
        Bill’s path with an attorney as a father and a financial backing from youth could exploit his idea(s) and move ahead.
        I lived in Sunnyvale prior to these guys and we had 40 acres of land but parents split sold it and moved away.
        only laugh or cry when I look at what could have been.

      • http://www.applebythehour.com Jarrett

        Your parents must have known my grandfather. My Dad’s family spent a few months in Vegas in 1951 ( 1 of the 5 first grades he attended in 5 different states that years) A developer was a little short on paying my grandfather for the completion of quite a few homes. The gentleman offered my Grandfather some land in either Idaho or Wyoming instead of waiting several weeks for the cash. My Grandfather talked it over with my Grandmother, who hated the idea on every front) they decided to wait for the cash. Some time there after oil was discovered. I am not sure my Grandfather held it over her head, I would have though.

        Fortunes are generally lost before they are actually realized simply by not taking the chance.

  • warhed

    seems like palm went about things the wrong way from the get-go! w/sprint’s exclusiveness & the commercials that vzw 1st came out with. completely crap from the begining. pre/pixie are good devices.

    • Andrew Munchbach

      I like the platform too, but they need to make a big move and they need to do it quickly.

      • Gauntlet Down

        A lot of folks are suggesting some insane company will NOW want to buy Palm after Palm outright said their products aren’t selling.

        Yeah, that’s gonna happen!

        Insanity.

  • Ari

    So unfortunate. WebOS is really among the premier mobile operating systems around but just too late. No way palm can hold on long enough, and elevation partners just can go against the likes of Apple, Google and now Microsoft. I love my Pre but this may be the end for Palm.

  • wam

    I would get me a couple of Palms (Pre and Pixi) if Sprint would let me put them on my SERO account. That would be at least 2 more Palms sold.

  • Laz

    Even VZW could not save Palm.

    The HTC Incredible is launching on VZW soon? Why not the Desire? The Incredible seems so weak in comparison to the Desire! I know the drill and should not be surprised that such a nice phone is missed by VZW once again…The Desire has 576MB of Ram where the Incredible only has 256MB Ram and has not listed the ROM just yet. I am not a VZW hater just a long time customer who will not drink the “punch” any longer…

  • bob

    look at the pre
    now look at the iphone
    see the difference?
    now see why pre is a flop?
    why doesn’t Palm management see that?
    why did they come out with the WRONG phone?
    painful lesson

  • Fernando

    Dude, this sucks. I’ve been waiting over here on at&t for a webos phone and now it seems I may not get one, but even if I do the company that makes it may not be around long enough to support it? Palm needs to release the pre2 and pixi2 now on all carriers, if they keep waiting they’ll have iphone 4g and winpho7 to deal with. Such a shame.

    • Seabass

      I’m with you on this one.This sucks they should of went for all the major carriers in the US not just sprint. Now if seems its little to late unless the pre2 comes out quick.

    • glass

      Yup, I’m in the same boat. Would an AT&T Pre + (or whatever it’ll be) be worth buying on a 2-year contract if Palm isn’t even around in a year? I want one BADLY, but smartphones need updates, y’know?

  • MilenkoD

    I love my Pre, but sadly if things don’t pickup with t-Mobile and AT&T I may be rocking a Nokia Pre sooner than I anticipated.

    Palm needs to expand their stratey with a fat partner like an IBM or Cisco type …

  • Sam K

    This news doesn’t surprise me. It was dumb of Palm to sell the Pre and Pixi exclusively through Sprint for such a long time. Sprint has been bleeding customers for a long time and there was no way the Pre was going to stop that from happening. If they had sold it through Verizon sooner and come out with a GSM version for other carriers then maybe they’d be in better shape.

  • zanzabar

    this is very sad because the whole world knows how great and beautiful webOS is, and a lot of people, including android and iphone users, are very well aware that webOS is simply the most superior mobile OS out there.
    however sad this is, it is not unexpected. people do check out palm’s phones at sprint and verizon’s stores. heck, i, myself sometimes go into the stores just to play with the pre/pre plus! the problem is that people love the OS but dont end up purchasing the device. the problem is not marketing or app availability. it’s hardware! harware!!! hardware!!! i cannot buy a palm device because i
    1-need a larger screen.
    2-either a great VK or a larger blackberry-like physical K.
    3-a better build.

    i hope webOS gets coupled to a high-end device…

    some people keep mentioning the small number of apps but i dont think that that’s a major cause of palm’s decline. look at it this way, if people cared that much about apps, no one would buy an android phone. android’s apps are in a sad and sorry state, yet android phones sell.

  • stee

    seriously… here’s an idea. how about release some new hardware STAT AND DON’T PARTNER WITH SPRINT ON NEW HARDWARE. that’s what the big downfall. the hype around the pre died shortly after it was release on sprint. obviously there is a LOT of android devices flooding VZW right now as well which doesn’t help things. they need to release new hardware, partner with VZW and have some quality ads created for it.

  • ChrisNYC

    I saw Wall Street analysts warming up to the Pre and saying Palm is back, yay!

    Some are saying Motorola is back as well. I have my reservations there as well.

  • MikeD

    The problem for Palm was they started all wrong.

    1. They launched the Pre on Sprint

    2. They didn’t have a their own music conduit from the start.

    3. Where is Palm Desktop for Pre? That was their killer desktop app.

    Palm seemed so obsessed with trying to beat the iPhone, that they forgot to focus on substance over style.

    Great you can multitask, but where are the apps to multitask. Apple had about 400 apps ready on day one of the AppStore. Yes they now months later have some good Apps but the train left the yard two years ago.

    And the pirate radio attitude of breaking into iTunes was stupid.

    The Pre is a good device and I wish it well but the focus on beating Apple is misguided. They should remember they have Blackberry, Symbian Windows Mobile and Android to contend with as well.

  • Derrick

    I saw this one coming. I’ve owned 2 iPhones, a Palm Pre, and now a Droid. Palm’s mistake was not getting WebOS up to snuff before releasing it. Glaring omissions in very basic functionality. They had to know that coming out with an OS that was half-assed wasn’t going to fly when the competitors who “just started” the new wave of capacitive touch screens already began adding things like copy n paste, video recording etc. They [the competitors] had an opportunity to come out with a half-asssed OS because everyone was so pumped about this capacitive touch screen with full web browser. They were able to wait for Apple, Android etc to work out the kinks in things like video recording, and copy and paste, etc. WebOS should have came out the gate touting everything the others lacked AND MORE! Not coming out TRYING to compete while still implementing features. That was a HUGE mistake.

    I loved my Palm Pre, it was the next best thing (at the time) in my opinion to the iPhone. The problem, basic functionality was lacking, it takes 5 mins to frickin’ boot/restart. The app store is deplorable and I saw the writing on the wall after a few months. Developers have better operating systems to develop for like Apple and Android these are being put in the hands of the masses. I went with a Droid because I was sick of Apple’s control and I knew Google would eventually surpass them or at least eventually match them at a much faster scale given their wider audience base (i.e. more carriers, more devices).

  • http://www.applebythehour.com Jarrett

    This site is a lot like my own personal twitter page. It seems that certain kiddos on here follow me to the point of down ranking any and all of my comments.
    So, to all that have this need to follow me, I will continue to make myself available.

    Note, any negative trolling attack to this post only reinforces the post. Sir/Ma’am

    Cheers

    • secretmanofagent

      I don’t know who you are, and I don’t care.

      • http://www.applebythehour.com Jarrett

        And that is how everyone should look at it. But for some strange reason people on this board want to hang from someones nuts. I have never been able to figure that out. Good day.

        Cheers

  • http://3fs.si andraz Logar

    the biggest mistake actually was how they treated the rest of the world. Like EU (double the mobile size of the states+canada), not even mentioning asia. So, you could say that if they screwed up the states, they can survive on EU alone. But you would not believe how they screwed up EU…. not just badly, but completely. Totally. So yeah, I guess they are dead. Very sorry to say that (palm pre user though, from EU), but they managed to do everything wrong except the OS and hardware.

  • blainer

    I love my Pre but they serious need to come out with some high-end hardware. Not “just enough” but eye-catching but something GOOD. I’d love a droid like phone(with a better keyboard) running WebOS on an OMAP 4 or Snapdragon. As Andrew said, they need to make a big move and they need to do it quickly, before the average consumer totally forgets about them!

    • jackfrost

      +1. If they launched a candy bar phone (preferably keyboard-less) made out of metal instead of plastic with something snappier with a processor that doesn’t feel painfully slow after using anything else, I’d buy it in a heartbeat.

  • http://www.applebythehour.com Jarrett

    If Palm goes under how many Apps will they be able to run at once on a new device? Multitasking on a small screen will take the world by storm, or put your company out of business.

    I am not knocking multitasking on a phone. You can do it on Android. Hell, they have 20+ devices and in two years have sold roughly 8 million devices. As you can see, there is a huge market for multitasking.

  • ljp

    I think the six month delay between the initial hype and release didn’t help them out. Just poor decisions all around but it’s not shocking considering how far Palm has fallen.

    It seems to be a hallmark of the companies that were in the smartphone segment during it’s infancy. MS has a revolutionary OS! There’s nothing like it! But you won’t be able to get it until December. Nokia will reclaim their title as the innovator and untouchable profit maker by releasing the phone to beat all phones…in 2011. No one besides gadget lovers really cares after that long.

  • Jeff

    Palms first mistake was offering web os on sprint and verizon. Both companies are bankrupt and living hour by hour. verizon was downgraded yesterday and they believe within a month they will be consumed by AT&T. Palms second mistake was trying to compete with the Jesus phone (iPhone) every single phone that gets in the ring with the iPhone flops!

    • http://www.applebythehour.com Jarrett

      That isn’t fair, the Nexus One has sold like 200,000 units so far.

      • TWiT Commander

        i thought it sold 80k units.

      • Sugar Grove

        Jarrett,
        I think you would agree, it’s just not enough in this market to make a smart phone. Consumers are now demanding state of the art features, competitive pricing and service.
        iPhone 4g could have a touch sensitive body with a ton of new apps to exploit and enhance the user experience. Sadly unless they expand to other carriers they “the carriers” will keep pushing the hardware they can turn a buck on.

      • http://www.applebythehour.com Jarrett

        Actually it will be incremental changes to the devices and the software while adding services that will expand Apple or anyones marketshare. Hot phone have always come and gone. It is the nature of the beast.
        In the PC wars Microsoft was able to easily when the OS battle because they had so many vendors. You might say Android has the same advantage but you would be wrong. The average time between desktop OS releases is 3+ years. the time between Mobile OS launches for Android is like 6 months, with Apple it is major releases once a year. How many new Android phone is a person going to buy a year?
        We know Woz and the 2% of major geeks might, but the mass majority of consumers are not going to buy multiple phones a year. I have had my iPhone going on 2 1/2 years. I currently don’t need a new phone. My existing hardware works with the services and software.
        People need to quit comparing Android’s deployment with Windows. They are two different beasts. Besides, even though I have never used Android I know from what I have read that the difference between the two is that Android is a pleasure to use.
        Once Google gets their fragmented platform more control maybe they will sell their 10 millionth device.

        Cheers

    • Eric S

      AT&T isn’t going to buy Verizon. The networks are two different technologies and it would be prohibitively expensive to integrate. Also, there would be major antitrust concerns.

  • Snail

    Close the doors

    • TWiT Commander

      it’s jammed.

      oh no!

  • PeterB

    KIRF level build quality isn’t helping them much either. The phones just scream cheap plastic knock-offs.

    I handle inventory for several VZW stores, we have sold 0. I recently sent all of them back except 2 of each per store. 1 for display, 1 in case someone wants to buy it.

    Also: Note to palm…..

    If you can’t bypass the mandatory activation screens to actually USE the damn menus and see what the phone is like, it doesn’t matter how great your OS is.

  • MobileGuru

    Poor Palm. WebOS is truly amazing. It is true they made the mistake of being exclusive only to Sprint. But if you think about it, Apple managed to do it with the Iphone I guess it depends on the customers. AT&T and their poor service coupled with Apple and a phone which is not even close to being remarkable any longer. Sprint and the Pre was a good combo. I believe Sprint years back left a bad taste in many peoples mouth which still lingers today. I like the Phone in many respects. But now I currently have a palm Pre on Sprint 9and doesn’t hurt that my plan doesn’t break the bank either. Can’t imagine not using another WebOS device.

  • Zomer

    Palm just needs a new CEO!

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