Palm’s took another pounding in its third-quarter earnings because consumers continue to turn away from webOS devices.
The company reported a $22 million loss on revenues of about $366 million. The loss is not unexpected because the smartphone maker lowered its revenue expectations last month because of slower-than-expected webOS sales. Unveiled in January 2009, webOS was supposed to be the catalyst for Palm’s return to respectability and profitability. I love the platform and think it proved Palm still has great visions for the industry, but the mass markets didn’t agree. The company shipped 960,000 smartphones in the quarter, which was a 23% increase from the previous quarter. Of course, “shipped” doesn’t mean sold, as only 408,000 Palm smartphones were purchased by customers. By comparison, Apple sold about 8.7 million iPhones during its last quarter. While no one is expecting webOS to have iPhone numbers, the difference is staggering and shows how far behind Palm is.
“Our recent under-performance has been very disappointing, but the potential for Palm remains strong,” said Jon Rubinstein, Palm’s CEO, in a prepared statement. “The work we’re doing to improve sales is having an impact, we’re making great progress on future products, and we’re looking forward to upcoming launches with new carrier partners. Most importantly, we have built a unique and highly differentiated platform in webOS which will provide us with a considerable – and growing – advantage as we move forward.”
The company is hitting the streets (and Verizon stores) with its Project JumpStart, and this could help goose sales. The Pre is also expected to come to AT&T – although those plans may be delayed – and that will expand its customer base. I still think it’s going to be tough to convince iPhone owners or potential iPhone owners to choose the Pre over Apple’s handset, so Palm has a tough row to hoe. Let’s hope Palm still has something up its sleeve: how badly would you want a large AMOLED webOS device with a boatload of storage and a 1GHz processor?
[Via Palm]