palmOne Struggling to Meet Demand for Treo 600

The Treo 600 has been a runaway success for palmOne. The company even gave this device credit for its unexpectedly good financial results last quarter. However, there is one significant problem with this smartphone: palmOne can't get enough parts to meet customer demand.

While some might find this to be an enviable situation, palmOne isn't happy about it. Lost sales are costing the company money at a time when it is trying to return to profitability.

palmOne's CEO Todd Bradley told Reuters that his company is unable to get enough LCDs and related components to meet demand for its flagship smartphone."Market acceptance has been extremely strong from carriers and customers, and one of the challenges we're having right now is that demand is outstripping supply," he said.

Mr. Bradley said that palmOne has been able to find multiple suppliers for the parts it needs, but it still hasn't been enough.

A Best Seller

There can be no doubt that the Treo 600 has become a very important product for palmOne. During its most recent financial quarter, it drew 28 percent of its revenue from this one model.

palmOne reports that it sold about 100,000 Treo 600s during the fourth quarter of last year. It sold about 150,000 units in the first quarter of this year. It announced last week that it expects to ship about 160,000 Treo 600s during its current financial quarter, which ends in May.

This will continue to be an important product category for palmOne in the future. In January it announced it was putting greater emphasis on selling smartphones. Its primary reason for buying Handspring last year was to acquire both the Treo 600 and the expertise of the people who designed it.

palmOne's CEO said in March that his company is developing a range of Treo models for the future that will be "good, better, and best." Rumors of a replacement for the Treo 600 have been circulating for months.

Related Links

• palmOne Revenues Up on Strong Treo 600 Demand
• RumorMill™: Treo 610 Coming this Fall