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Palm stock plummets after poor sales force company to lower guidance

post #1 of 72
Thread Starter 
Palm's stock tumbled more than 19 percent Thursday after the handset maker decreased its forecast for third-quarter sales dramatically, citing lower-than-expected demand for its smartphones.

Palm said it expects its sales to be between $285 million and $310 million, well below its previous forecast of $1.6 billion to $1.8 billion. Palm chief Jon Rubinstein said that "broad consumer adoption of Palm products is taking longer" than he and his company had anticipated.

"Our carrier partners remain committed, and we are working closely with them to increase awareness and drive sales of our differentiated Palm products," he said.

According to Forbes, analysts had on average expected Palm to report sales of $424.9 million when it releases its third-quarter earnings on March 18.

Wall Street did not respond well to the news, with the company's stock dropping $1.56, or 19.28 percent, to 6.53 by the closing bell on Thursday.

Palm recently expanded its Pre and Pixi smartphones beyond carrier Sprint to Verizon, with the exclusive Pre Plus and Pixi Plus. The company also has plans to release two devices based on the WebOS mobile operating system on wireless provider AT&T, the exclusive carrier of Apple's iPhone in the U.S.

Palm turned heads in 2009 when it unveiled WebOS with a surprise announcement, earning positive reaction and buzz from the press.

Rubinstein served as Apple's iPod chief until 2006, when he formally retired from the company. In 2007, he was courted by Palm to serve as its executive chairman, and he officially took the role of CEO last summer, coinciding with the launch of the Palm Pre.

Though the Pre got off to a strong sales start, it has failed to gain significant market share in the mobile space.
post #2 of 72
Palm Pre was always buyout bait.

Just a matter of time.

Funny thing is, MDN called this from day one. Say what you will about crazy MDN, but they're usually right. Part of it comes naturally from backing the winning horse, and the rest . . . might just be uncommon prescience after all.
post #3 of 72
Too little, too late! 'Another one bites the dust!'
post #4 of 72
Palm is dead. Long live Apple.
post #5 of 72
I had a Palm Pilot PDA in, I think, 1997 or so...man I thought it was the bee's knees! Sitting there with my stylus inputting contact names, phone numbers and addresses. Plus making 'to do' lists, ad nauseam under the false pretense that I was getting organized and therefore 'productive!'

Good times!
post #6 of 72
I cry crocodile tears
post #7 of 72
It's sad to see a once proud company on the verge of tripping into their grave. I did Palm development for many years back in the day. When they abandoned PalmOS and left it hanging for basically years, they lost me and a lot of other developers. Those monkeys running the company back then took the money and ran.

I knew people at Palm asking me and other developers to return developing for them when the Pre has just been announced. Because of the way their shop treated the people that made them successful, I told them their platform was doomed and I refused to do anything for them. Thankfully, I'm still friends with those people and of no surprise, a few months after they tried to sway me to develop for them, those same Palm folks quit the company as they saw the writing on the wall.

Such a shame. The worst part is that the executives that ruined Palm are working elsewhere and certainly in my belief, fabricating stories that makes it sound like they had nothing to do with its demise.

Good riddance Palm. You'll go down in history as how BAD management can ruin a great company.
post #8 of 72
indeed. too little, too late. they have nothing to leverage. no direction to grow beyond making ever cheaper phones. of course you need people to buy them if you want to keep making them.
post #9 of 72
If I remember correctly, along time ago there was a story I read where the CEO/Founder of Palm walked around for months with solid piece of wood in his jacket pocket which was about the size/weight of the Palm Pilot PDA that was under development.

Palm was fortunate to have him...thank goodness we have Stevo....
post #10 of 72
First...
Gateway
Circuit City
Nextel
Cingular
Alltel

**********
Next....
Palm
Sprint
Blockbuster (for sure)
Motorola (mobile cell phone division/offshoot)?

I'm sure I'm forgetting a lot!
post #11 of 72
I told you so. Rubinstein is busy trying to be Steve Jobs that he forgot Palm is not Apple. Beside this is what you get for going head to head with everyone else instead of making partners. Furthermore, they should have spent more time improving their products instead of trying to crack iTunes. And who in their right mind release a phone the same month Apple release the iPhone?!
post #12 of 72
Quote:
Originally Posted by sflocal View Post

It's sad to see a once proud company on the verge of tripping into their grave. I did Palm development for many years back in the day. When they abandoned PalmOS and left it hanging for basically years, they lost me and a lot of other developers. Those monkeys running the company back then took the money and ran.

I knew people at Palm asking me and other developers to return developing for them when the Pre has just been announced. Because of the way their shop treated the people that made them successful, I told them their platform was doomed and I refused to do anything for them. Thankfully, I'm still friends with those people and of no surprise, a few months after they tried to sway me to develop for them, those same Palm folks quit the company as they saw the writing on the wall.

Such a shame. The worst part is that the executives that ruined Palm are working elsewhere and certainly in my belief, fabricating stories that makes it sound like they had nothing to do with its demise.

Good riddance Palm. You'll go down in history as how BAD management can ruin a great company.

Very well said...Most companies end up this way after the first generation of leaders leave! There are more Mervin's, Gateways and Circuit City's than Fords, McDonalds and Coke's in this world.

Not to belabor the point, but there's a bird that resides in the Sahara that descends to it's nest located on the ground from a very high altitude in ever decreasing circles, (looking for possible predators)....b/c the bird is so well camouflaged when it does indeed land it seems to 'disappear!' The old adage is that it has flown 'ever decreasing circles' until it flies up its own a**hole!

This is what Palm is doing! And to a lesser degree so is MS....Most businesses are 'in the business' of going out of business because of mis-management!

Ps. Please feel free to use the above analogy the next time you get the occasion to talk to your CEO!
post #13 of 72
Palm did many things right with Web OS, arguably the best looking UI out there.

But it also screwed up royally on key fronts, such as choosing Sprint for the initial launch (should've been Verizon Wireless), not having an SDK or app store at launch, keyboard and build quality issues, Pixi and Pre not being fully compatible app wise, and iTunes sync fiasco. Meanwhile, the market became super crowded and competitive with Android and soon-to-arrive Windows Phone 7.
post #14 of 72
No biggie, just getting ready for the big Apple purchase!
post #15 of 72
Quote:
Originally Posted by NasserAE View Post

I told you so. Rubinstein is busy trying to be Steve Jobs that he forgot Palm is not Apple. Beside this is what you get for going head to head with everyone else instead of making partners. Furthermore, they should have spent more time improving their products instead of trying to crack iTunes. And who in their right mind release a phone the same month Apple release the iPhone?!

That's all true. Palm does not have the product depth that Apple does. They should have licensed Android and gone in that direction. Their expenses would have been lower. What have they gained by creating a totally new OS? At least Apple spreads its OS development costs across all of its segments.

Let's hope Motorola, RIM, or Nokia buys Palm before they fold. Apple doesn't need them but could extend offers to their developers and engineers. Call it an unofficial ex-Apple employee amnesty plan. Microsoft did it after the dot-com bust of the late 90s early 2000s bringing back many ex-Microsofties. They'd get the cream of the crop without actually buying Palm.
post #16 of 72
Quote:
Originally Posted by filburt View Post

Palm did many things right with Web OS, arguably the best looking UI out there.

I have to agree. I got a chance to play with a Pre once and was blown away by the UI. It looked like something Apple might develop 7 years from now. Very intuitive, the way it handled multi-taksing was quite remarkable.
I wouldn't be surprised if Apple makes a play for Palm.
post #17 of 72
Quote:
Originally Posted by christopher126 View Post

I had a Palm Pilot PDA in, I think, 1997 or so...man I thought it was the bee's knees! Sitting there with my stylus inputting contact names, phone numbers and addresses.

I still do that, on my Clie. Calendar, contacts, and some apps.

Quote:
Originally Posted by sflocal View Post

...I did Palm development for many years back in the day. When they abandoned PalmOS and left it hanging for basically years, they lost me and a lot of other developers.

Too bad, and Sony suddenly discontinued their excellent Clie line. People can still write 68k code on Palms; it makes for a good hobby platform.
post #18 of 72
Quote:
Originally Posted by rain View Post

I have to agree. I got a chance to play with a Pre once and was blown away by the UI. It looked like something Apple might develop 7 years from now. Very intuitive, the way it handled multi-taksing was quite remarkable.
I wouldn't be surprised if Apple makes a play for Palm.

Can you imagine Jobs and Rubinstein negotiating a buyout? Priceless.
post #19 of 72
You lost me when you abandoned PalmOS for Windows Mobile. Yuck.
post #20 of 72
Quote:
Originally Posted by filburt View Post

Palm did many things right with Web OS, arguably the best looking UI out there.

But it also screwed up royally on key fronts, such as choosing Sprint for the initial launch (should've been Verizon Wireless), not having an SDK or app store at launch, keyboard and build quality issues, Pixi and Pre not being fully compatible app wise, and iTunes sync fiasco. Meanwhile, the market became super crowded and competitive with Android and soon-to-arrive Windows Phone 7.

I agree on all points but one and I"d like to add another point that helped this potential win for Palm ultimately fail.

1) I think the syncing with iTunes was a good strategy because the people buying the Pre likely weren't buying the iPhone anyway, but it did give Palm a lot of free press. I knew BB users that had no idea RiM made an app that will sync with your iTunes library, but everyone know that the big bad giant wasn't letting the little guy have a chance by illegally (haha) pushing Palm out of the ubiquous iTunes.

2) The part I'd add is the release date, which does go along with your other points but should be stated directly. The oddly wanted to beat Apple's 3rd iPhone to market, yet they should have waited well into Fall or Winter to release the Pre with good HW, a well tested OS, a proper webcode-based SDK since it's a webcode-based OS and apps, at the opposite end of the iPhone hoopla.
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post #21 of 72
Palm did so many things wrong.

1) Palm Pixi. Why? Should have stayed with just one model, the Pre. Didn't they know about economies of scale? And developed the SDK and App store earlier.

2) Should have partnered with somebody with deep pockets and market presence. Microsoft or Dell.

3) Should have gone with Verizon first. But, Verizon would have screwed them.

Roger McNamee, what a fool, he !!
post #22 of 72
I live out of the country and have used Palm phones for many years, liking the versatility and stylus. When my unlocked 950 died a few months ago I tried to get Palm to tell me what I should buy to replace it and could get no response on the web site. Nor could I buy an unlocked phone on the web site, although I had done so previously. Their web site wasn't clear as to wether I could convert my Palm OS data to their newer OS's and I finally just gave up.

I was able to buy a Blackberry Curve at less than half the price of my last Palm 950 and have adjusted, sort of, to not having a stylus (games suck using a trackball). Palm should pull their heads out of the sand and go back to servicing their traditional customers, but it is probably too late as I have found a way to convert my Palm contacts and won't buy another one of their products.
post #23 of 72
Although Palm did quite a bit of lifting off of Apple (it even borrowed Apple's pebble desktop picture), it was a decent product. It, however, had and has three big problems: 1) Apple's 100, 000 plus application store, 2) Android, and 3) RIM.

There just isn't a niche where Palm fits where it can differentiate itself. RIM and Apple offer all in one solutions. RIM has an entrenched business cliental. The only reason you'd go with Palm over Apple is if you can't or don't want to go with AT&T. Most of the benefits Palm's OS held over Apple vanished when Apple updated the OS and Phone. So, Palm just can't compete with Apple's 100, 000 application store considering any benefits the Palm OS have are marginal at best. Further, the iPhone seems like a more sturdy product.

Apple would never buy Palm unless it wanted take back all the traitor engineers who Palm enticed to jump ship from Apple to Palm. Maybe Palm owns some patents Apple would be interested in. Perhaps some it can use against Nokia. Palm should consider opening up it's OS like Google did. The OS seems better then Android. Maybe Microsoft should consider purchasing it.
post #24 of 72
Quote:
Originally Posted by solipsism View Post

I think the syncing with iTunes was a good strategy because the people buying the Pre likely weren't buying the iPhone anyway, but it did give Palm a lot of free press. I knew BB users that had no idea RiM made an app that will sync with your iTunes library, but everyone know that the big bad giant wasn't letting the little guy have a chance by illegally (haha) pushing Palm out of the ubiquitous iTunes.

I disagree. I believe the iTunes project was the beginning of the end for the Pre. While fist pumping, counter-culturalists were egging Palm on to stick it to the man, the rest of the world saw Palm for what they were: a marginal, desperate, shady bunch of hacks who were only marginally higher up the food chain than Psystar. They traded credibility and general good will for a few weeks of bootleg iTunes syncing. It was a bad trade.
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post #25 of 72
Palm didn't stand a chance, not for thier product or their competitors, but because of their cost structure. They didn't need an innovative product nearly as much as they needed desperately to re-invent their business itself. They needed massive layoffs or some form of restructuring years ago so they would have time for their products to mature.

The fact that they lacked a strategic vision as well (at least pre-Rubenstien) just made matters worse.
post #26 of 72
One question - where are all the Palm fans? Last year a lot of people were on here telling how Apple's days were numbered and the Pre was going to revolutionize the smart phone market, saying the PalmOS was superior to the iPhone... ::chirp chirp:: think I hear crickets.

The Palm UI may be GREAT, but what good does it do if the common user doesn't buy the phone? I'm no mobile tech know it all, but Palm messed up in these ways:

1) horrible marketing - those commercials made no sense and the common buyer didn't understand anything, plus that pasty lady was creepy.

2) the Pre is too small (heard many say this at my job and elsewhere) the keyboard is tiny and the device feels like cheap plastic ('cuz it is)

3) not making the OS open source to attract more developers and give it away to carriers like with Android. They tried to do too much by keeping it all in house.

4) the market is over crowded, most only have one phone and to pick Palm over iPhone, Android, or Blackberry is asking to much. Especially when you can get Android or BB on many different carriers. Which leads me to...

5) only being on Sprint was just dumb, doesn't Sprint have the smallest market share? So with that you are already limited and by time they got on VZ it is too late. Those who may have bought it on VZ last year already went out and bought a Droid, iPhone or other.

6) simply bad management

:later.
post #27 of 72
<quote> Palm said it expects its sales to be between $285 million and $310 million, well below its previous forecast of $1.6 billion to $1.8 billion. </quote>

I think this confuses quarterly and annual numbers. According to the N.Y. Times, "Palm forecast revenue of $300 million to $320 million, including deferred revenue, for its fiscal third quarter, which ends this month. That was well below the average analyst estimate of $424.7 million, according to Thomson Reuters.

It also said full-year revenue would be well below its previous target of $1.6 billion to $1.8 billion. Wall Street was expecting $1.6 billion."
post #28 of 72
but, but it has MULTITASKING and will soon have FLASH, how can this possibly be!!!

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post #29 of 72
According to Dan Frommer the failure of Palm means Apple will soon follow down the drain. But his logic makes zero sense, leaves out many factors, and is about the worst thing I've ever read by him.

I kind of expect Frommer to be the Gruber Jackass of the Week.

Quote:
Palm is basically Apple, Jr. And if a bunch of Apple geniuses can't kick butt on their own at Palm, how are they going to kick butt without Steve at Apple?

http://www.businessinsider.com/palm-...ve-jobs-2010-2
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post #30 of 72
Quote:
Originally Posted by hill60 View Post

but, but it has MULTITASKING and will soon have FLASH, how can this possibly be!!!


And video recording!
post #31 of 72
Quote:
Originally Posted by hill60 View Post

but, but it has MULTITASKING and will soon have FLASH, how can this possibly be!!!


I'm so with you. I know it's petty, but Palm blatantly ripped off so much and behaved so badly when it came to Apple that I when from a person who had sympathies for them, to a person who watches with glee as they circle the drain. I can't wait to see their stock price when iPhone 4.0 hits
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post #32 of 72
Quote:
1) horrible marketing - those commercials made no sense and the common buyer didn't understand anything, plus that pasty lady was creepy.

Not sure if she is pasty, but I've seen other pics of her, and IMO, she's hot.

Palm paid millions for the rights to the Palm OS back from Access. Access laughed all the way to the bank.
post #33 of 72
Quote:
Originally Posted by hill60 View Post

but, but it has MULTITASKING and will soon have FLASH, how can this possibly be!!!


The folks screaming of Apple's death due to the Palm Pre seem strangely quiet today. Hmm?? Perhaps they are all at the local restaurant eating huge portions of humble pie? \
post #34 of 72
Yeah, this babe.

post #35 of 72
Quote:
Originally Posted by Mac Voyer View Post

I'm so with you. I know it's petty, but Palm blatantly ripped off so much and behaved so badly when it came to Apple that I when from a person who had sympathies for them, to a person who watches with glee as they circle the drain. I can't wait to see their stock price when iPhone 4.0 hits

They seem like they did a lot of that all at once, but I have no problem with that, even as a shareholder of Apple. This is how companies play ball. Apple isn't absolved from being underhanded when it suited their best interests. If Palm was successful then we may have seen a crap load of lawsuits from Apple crop up because their pockets would have been deeper and the offense more pronounced. Capitalism FTW!
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post #36 of 72
Quote:
Originally Posted by sprockkets View Post

Yeah, this babe.


Well, it does look as though she might have all her teeth.

So I guess those folks in Alaska might consider her "hot".
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post #37 of 72
Quote:
Originally Posted by christopher126 View Post

First...
Gateway
Circuit City
Nextel --> US Sprint merger
Cingular--> AT&T merger
Alltel

**********
Next.... -->Apple merger
Palm
Sprint
Blockbuster (for sure)
Motorola (mobile cell phone division/offshoot)?

I'm sure I'm forgetting a lot!

How a video store sits in these ranks one can only assume it's for fun next to Circuit City.
post #38 of 72
Quote:
Originally Posted by sprockkets View Post

Yeah, this babe.


Amazing what photoshop does to skin tone and texture.
post #39 of 72
Quote:
Originally Posted by mdriftmeyer View Post

How a video store sits in these ranks one can only assume it's for fun next to Circuit City.

Yep, I knew about the mergers...Not sure about Cingular but Nextel pretty sure was in trouble around the time of the merger.

I meant the first group were out of business and the 'next' were the next group that will be out of business soon. I didn't mean NeXT of Stevo's fame!

Sorry for the confusion...Circuit City, CompUSA poorly run...Blockbuster the clock is ticking because they have a 1990's business model-renting movies!
post #40 of 72
Quote:
Originally Posted by walshbj View Post

According to Dan Frommer the failure of Palm means Apple will soon follow down the drain. But his logic makes zero sense, leaves out many factors, and is about the worst thing I've ever read by him.

I kind of expect Frommer to be the Gruber Jackass of the Week.



http://www.businessinsider.com/palm-...ve-jobs-2010-2

Please tell me Frommer was only joking.

Even after all these years and all these products, a lot of poor souls still have no understanding of how Apple works.
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