Thumbs down for Palm profits
Yesterday Palm announced their financial results for Q3 FY2010 and it was ugly. Worse news is that Q4 is going to be even uglier. Palm made a loss of $102.8m. In terms of cash flow, Palm burned through an additional $22m cash this past quarter, still spending more than they are managing to bring in. Nearly a million phones were shipped, while only 408,000 were actually sold. Ouch. This was also fewer than the 573,000 phones sold during Q2.
Given that Palm has an excellent software platform in WebOS and competitive hardware in the Pre, I blame their woes on:
1. Their initial exclusive tie-up with Sprint which was not good for them as Sprint did not invest enough in marketing the Pre. It also meant that by the time Palm launched on Verizon their moment had past, and the Droid had arrived in a big way, stealing what little thunder was left for the Palm. The Droid sold 1.05m units in the first 74 days after launch, more than the iPhone’s 1m units.
2. Their restrictive practices around developing WebOS apps as well as restricting access to the apps to users in the US.
How is Palm going to reverse their fortunes? They still have options, but will have to move quickly if they want to stay relevant.
They should launch in South Africa. That will be turn things around. Maybe not for Palm but it will for me and Alastair and Roland, the only 3 Palm Pre users in Africa.
This is not great news for Plam but I believe they saw this comming when Sprint was so luke warm and Droid certainly blew the wind out the Palm sails.
Our esurance is that Palm is in for the long haul and they will have many cunning plans left in the bg, despite the fact that they probably have many many new devices in the pipline with Web OS. There are rumbles of the a new device at being announced on iPad(sounds like a kithchen appliance) release.
What so scary is Droid is not that great…. just another Moto which willcome and go. There is so much $$$$ in that company they can do what the hell they want when they want….thats what gives Palm such awsome credability in the running…. Pre Plus for O2 next month….lets hope they get some more units sold…..lets not talk about South African market….which I belive is very close to devices landing.
Frigg I just want my Classic emulator hurry up App Cat !