Palm Pre beats expectations, drops WiMo to focus on WebOS
Palm announced smaller than expected losses on sales of the Pre, but its outlook failed to excite investors. Going forward, the company plans to raise new capital and bet the farm on WebOS, dumping both its older Palm OS and Microsoft's Windows Mobile.
Palm announced sales of 823,000 smartphones, including both its new WebOS Pre and existing models of Treo and Centros that use the classic Palm OS and Windows Mobile. Wall Street's expectations had come in at 700,000 to 800,000.
"I think they had a really strong 1Q. Obviously, well above expectations," said Avian Securities analyst Matthew Thornton in a report filed by Yahoo Finance. "But when you back out the first-quarter upside and the full-year guidance that they provide, then there really isn't much upside for the last three quarters. Of course, 2Q is going to be down."
Palm reported a net loss (applicable to common stockholders) of $164.5 million for the quarter ending in August. It plans to raise new capital in the sale of 16 million shares. Elevation Partners plans to buy $35 million at the offering, according to the report.
After the very high profile introduction of the Pre in January, the company almost silently launched the Pixi, a slimmed down new WebOS phone without WiFi, earlier this month. It is expected to sell for $99 exclusively through Sprint later this year. The Pre's launch fireworks fizzled with the introduction of the iPhone 3GS, which erased the hardware advantage Palm expected to maintain, dramatically reshaping inventor's hopes.
In the company's earnings conference call, Palm chairman and chief executive officer Jon Rubinstein, a former Apple executive (and NeXT veteran), seemed to channel Steve Jobs of ten years ago in saying, "We?re making significant progress with Palm?s transformation, and our culture of innovation is stronger than ever. We?re launching more great Palm webOS products with more carriers, and turning our sights toward growth.?
Rubinstein said Palm would be working to develop a family of WebOS products, establish a "world-class" development platform, build greater awareness of the Palm brand, and work to execute its goals with precision.
Part of that strategy involves dumping any distractions, including both the company's original Palm OS and the Windows Mobile partnership that Palm forged with Microsoft in 2006, a year before Rubinstein arrived. Palm's support for Windows Mobile helped nearly double Microsoft's market share at the time.
The discontinuation of Palm's Windows Mobile devices comes on the heels of Motorola's announcement that it will also drop Windows Mobile to focus on Android, and the news that HTC, the largest Windows Mobile manufacturer, plans to offer half of its smartphones running Android next year.
Palm announced sales of 823,000 smartphones, including both its new WebOS Pre and existing models of Treo and Centros that use the classic Palm OS and Windows Mobile. Wall Street's expectations had come in at 700,000 to 800,000.
"I think they had a really strong 1Q. Obviously, well above expectations," said Avian Securities analyst Matthew Thornton in a report filed by Yahoo Finance. "But when you back out the first-quarter upside and the full-year guidance that they provide, then there really isn't much upside for the last three quarters. Of course, 2Q is going to be down."
Palm reported a net loss (applicable to common stockholders) of $164.5 million for the quarter ending in August. It plans to raise new capital in the sale of 16 million shares. Elevation Partners plans to buy $35 million at the offering, according to the report.
After the very high profile introduction of the Pre in January, the company almost silently launched the Pixi, a slimmed down new WebOS phone without WiFi, earlier this month. It is expected to sell for $99 exclusively through Sprint later this year. The Pre's launch fireworks fizzled with the introduction of the iPhone 3GS, which erased the hardware advantage Palm expected to maintain, dramatically reshaping inventor's hopes.
In the company's earnings conference call, Palm chairman and chief executive officer Jon Rubinstein, a former Apple executive (and NeXT veteran), seemed to channel Steve Jobs of ten years ago in saying, "We?re making significant progress with Palm?s transformation, and our culture of innovation is stronger than ever. We?re launching more great Palm webOS products with more carriers, and turning our sights toward growth.?
Rubinstein said Palm would be working to develop a family of WebOS products, establish a "world-class" development platform, build greater awareness of the Palm brand, and work to execute its goals with precision.
Part of that strategy involves dumping any distractions, including both the company's original Palm OS and the Windows Mobile partnership that Palm forged with Microsoft in 2006, a year before Rubinstein arrived. Palm's support for Windows Mobile helped nearly double Microsoft's market share at the time.
The discontinuation of Palm's Windows Mobile devices comes on the heels of Motorola's announcement that it will also drop Windows Mobile to focus on Android, and the news that HTC, the largest Windows Mobile manufacturer, plans to offer half of its smartphones running Android next year.
Comments
The discontinuation of Palm's Windows Mobile devices comes on the heels of Motorola's announcement that it will also drop Windows Mobile to focus on Android, and the news that HTC, the largest Windows Mobile manufacturer, plans to offer half of its smartphones running Android next year.
Motorola dropping Windows Mobile??? When did they announce that? I've seen the rumors but I've never seen anything from the company itself. Got a link?
(EDIT) Did a bit of searching and the closest thing I can find to that is a statement saying that Moto will be using Android exclusively for its "consumer" devices but Windows will remain on "business" ones. The distinction between a consumer smartphone and an business smartphone escapes me, I don't see any great technological difference - just a question of how you spend your marketing dollars and which apps you preload.
- HCE
MOT should buy Palm -- it's what they need in IP...
Very true. The key to success here in with control os the OS and the proprietary system with an open architecture for development of software. Palm does not have the economies of scale, but Moto and Nokia have it. So would Dell.
Building phones, PCs with somebody's OS is a low margin business that is very unstable. Look what happened to the PC business. MSFT and INTC control the architecture... and they made most of the money. Most box makers are sucking wind.
Palm has a shot... if they move quick. They got to cut deals with Verizon, T-Mobile, and foreign carriers like China Mobile, etc. Especially in markets where the iPhone is not there, yet.
I usually stay out of the financial discussions, but this one confuses me. The headline makes it sound like good news for Palm, but I failed to see any good news for Palm, here. They lost money and they are still hiding the sales figures for the Pre. Hiding sales figures instead of boasting about them is always a bad sign no matter who does it. The only good news I see is Palm's decision to drop the dead weight. WM is taking a well deserved beating. That always brings a smile to my face.
I was wondering the same thing. It is sad that Palm is a sinking ship.
I was wondering the same thing. It is sad that Palm is a sinking ship.
wouldn't palm be one of the... um... passengers, leaving the sinking ship?
""Sales fell to $68 million, badly missing analysts' forecasts of $291 million," Goldman reports.
So which is it? "Palm Pre beats expectations" or "Palm is going down the crapper?"
I am COMPLETELY confused here, folks! According to another site (MDN), on which the title of the article is "Beleaguered Palm?s loss widens 293% year-over-year to $164.5 million, sales badly miss expectations" . . . .
""Sales fell to $68 million, badly missing analysts' forecasts of $291 million," Goldman reports.
So which is it? "Palm Pre beats expectations" or "Palm is going down the crapper?"
I think both, actually. Palm is going down the crapper, but it's not going down as fast as expected... therefore the executives have the audacity to claim that the company is well on its way to a recovery, even though it's currently losing money. Anyway, time to say Windows Mobile is pretty far from a Windows monopoly
I am COMPLETELY confused here, folks! According to another site (MDN), on which the title of the article is "Beleaguered Palm?s loss widens 293% year-over-year to $164.5 million, sales badly miss expectations" . . . .
""Sales fell to $68 million, badly missing analysts' forecasts of $291 million," Goldman reports.
So which is it? "Palm Pre beats expectations" or "Palm is going down the crapper?"
I saw that as well. I'm trying to figure out which one is closer to the truth.
So which is it? "Palm Pre beats expectations" or "Palm is going down the crapper?"
It could be that both are true. "Palm Pre beats expectations" only talks about one specific device doing well, not the company as a whole.
After all they dropped Microsoft, and any enemy of my enemy is my friend.
A friend with a keyboard too.
Palm the underdog. Or dog under. Can they last?
I wonder why they didn't break out sales number for the Pre. Pre plus WinMo plus original Palm OS tells us something, but I think most people would be interested in hearing how many Pre units have been sold.
I read in an e-mail that Forbes sent me today, that the estimate is that Palm may have sold as many as 550,000 Pre's in the quarter. While that doesn't look like an impressive number when compared to iPhone sales, I suppose it is above the expectations set for the Pre.
Remember that Palm, just like Apple has a lot of deferred income from the phone. Once that income is taken into account their sales jump from $68 million to $360.7 million, and profits move from -$1.17 a share to -$0.10 per share.
Read it here:
http://money.cnn.com/2009/09/17/tech...ings/index.htm
After the very high profile introduction of the Pre in January, the company almost silently launched the Pixi, a slimmed down new WebOS phone without WiFi, earlier this month. It is expected to sell for $99 exclusively through Sprint later this year.
Huh! Apparently, they had some pennies to rub together...
The base is a LINUX kernel, wich on its turn is derived from UNIX.
Palm makes very nice machines, wich never feel like crap. webOS is also based on LINUX. I hope they'll manage to stay and secure their future.
I love my iPhone, but good competition is healthy!
I couldn't find my Forbes e-mail, but this article from CNN Money explains it.
Remember that Palm, just like Apple has a lot of deferred income from the phone. Once that income is taken into account their sales jump from $68 million to $360.7 million, and profits move from -$1.17 a share to -$0.10 per share.
Read it here:
http://money.cnn.com/2009/09/17/tech...ings/index.htm
Presumably, the change in GAAP accounting might help Palm out here then as well?
Presumably, the change in GAAP accounting might help Palm out here then as well?
This is something that most technology companies have been working for. I like the concept of GAAP as it requires companies to tell us more than they used to which is a good thing, and why many aren't happy with it. But some of the rules are arcane, and don't really express the financials properly, even though I understand why they do what they do. The concept of unintended consequences.
I Palm's sales are expressed as $68 million because of GAAP, when they actually sold $360 million of product, even if it's going to be accounted for over two years, then that should be given as their sales.
I understand the problems that some companies have made with this. Computer Associates, a few years ago manipulated their sales and earnings with this, by billions. This was one reason the new rules came into being, but they're too literal in some areas.