Palm has cut guidance due to unexpected slow sales

2nd March, 2010 by adina
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Palm has cut its guidance for the current quarter and expects to have between $285 million and $310 million in revenue. The company directly incriminates the “slower than expected” take up of the Pixi, the Pre and their Plus equivalents. It is also a fact that carriers have ordered fewer devices and occasionally delayed receiving orders until a later time. Jon Rubinstein, chief of the company, has however downplayed fears and emphasized that carriers would still be bound to its phones and pledged to have the networks keep advertising in order to be sure customers still know palm is an option for them.

The smartphone maker stressed some major difficulties ahead as its total fiscal year is now expected to end in May to generate revenues that are situated below what was originally estimated, between $1.6 billion and $1.8 billion.

These statements follow the rumours regarding disappointing Verizon sales and demonstrate palm is really squeezed by the pressure of the competitors on the networks it is present in. For example, the Motorola Droid and HTC Droid Eris are the current flagship devices at Verizon and are very competitive on price as compared to the Pre Plus and Pixi Plus. At Sprint, other Android phones like the Samsung Moment and HTC Hero are given secondary billing but it seems they have diminished the importance of Palm’s devices.

As a consequence, Palm’s near-term future will mostly depend on the ability of adding further carriers, like AT&T in the spring, or T-Mobile and other international providers. As iPhone pricing will force prices drop to or below $99 that are charged now for an iPhone 3G, Palm might face even sharper competition in the near future.


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