Palm has admitted it continues to be in financial trouble due to a limited demand for its smartphones. The company’s recovery plan is not working and due to the low demand for Palm handsets, both the Q3 and full financial year goals have been reduced.
The market for innovation is dominated by the likes of Nokia and Apple, and Palm had hoped Palm Pre would boost its own reputation. In 2009, Palm Pre was successfully launched together with its new OS, webOS. However, the attraction of the Pre just isn’t enough when the competition includes the iPhone, BlackBerry handsets and the Google Nexus One.
The low demand for the Palm Pre and other smartphones like the Pixi in turn led to orders being deferred and reduced by mobile network operators. The company referred to the situation in its statement: “…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.”
Palm has now warned that the financial year results would be “well below” the target it had set of $1.6 billion to $1.8 billion.
The doubly bad news for Palm is that its poor sales are announced at a time when sales of smartphones in general are on the up. In 2009, the mobile phone market picked up during the last three months because of the demands for smartphones – increasing by 41.1% in Q4 to 53.8 million units. In total, phones sales reached 1.2 billion units, according to Gartner.
In terms of the top smartphone sellers, Palm did not feature in the top five.
Shares in the company have fallen by 18% due to weak sales. For the full story on Palm, visit Times Online.
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