Poor Palm. After reporting another disappointed quarter, the one-time smartphone king is taking a beating on the stock market and multiple analysts have cut its price target on Palm shares to $0.
A Morgan Joseph & Co. analyst said the company is an “accelerating death spiral,” and Canaccord Adams isn’t optimistic about the company’s prospects.
“With what appears to be roughly 12 months of cash on hand, an accelerating burn rate, a complete lack of earnings visibility, and substantial debt and preferred equity, we no longer see any value in the company’s common equity,” said Canaccord Adams analyst Peter Misek in a note to investors.
How did it all go so wrong? Palm essentially invented the smartphone but it wasn’t able to adjust quickly enough for the demands of the market. Research In Motion ate its lunch in the enterprise space and Apple’s iPhone blew it out of the water with consumer – along with most handset makers, to be fair. Palm introduced webOS last year and the elegant operating system was supposed to bring the company back to glory. No one told consumers though, as Palm shipped nearly 1 million handsets last quarter but only 408,000 handsets were actually purchased by end users.
Palm CEO Jon Rubinstein thinks the Pre could have been a bigger hit if it had launched on Verizon Wireless earlier.
“If we could have launched at Verizon prior to the Droid, I think we would have gotten the attention the Droid got,” Rubinstein said during the company’s earnings call yesterday. “And since I believe we have a better product, I think we could have even done better.”
I think the Pre Plus is every bit as good as the Droid this “woulda, coulda, shoulda” talk is just horse apples. Palm, the Pre probably could have been on Verizon before the Droid but you chose outsold Palm as a company last quarter.instead. I’m sure they were offering the best deal at the time – and Sprint and Palm have deep relationships – but Palm can’t blame anyone else because it went for the short-term gain instead of looking at the bigger picture. If you want to know how bad it is, the freaking Droid itself pretty much
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