Palm's Last Quarter Was a ''Difficult Period''

Palm warned earlier this month that its revenue for last quarter was well below expectations, and yesterday it announced its quarterly results.

The company's total revenue was $192 million, down from $350 million in the same quarter a year ago. The company's revenue from smartphones -- it's bread-and-butter   -- was $171.0 million, down 39% from the year-ago period.

"We're working through an undeniably difficult period," said Ed Colligan, Palm president and CEO, "but near-term challenges shouldn't overshadow the fact that we are on track to deliver a breakthrough new platform and products that will bring a truly differentiated smartphone experience to our customers and reestablish Palm as a leading innovator in the mobile industry."

Colligan is referring to Palm's next operating system -- code-named Nova -- and the first smartphones running it, which are expected to be unveiled at the Consumer Electronics Show early next month. This is expected to combine new and old, with new product designs running an updated operating system, but including backward compatibility with the current library of Palm OS software.

Palm executives predict that their company will return to profitability at some point in 2010, based on the strength of this new platform.

Smartphones and Handhelds

During the Sept.-to-Nov. quarter, Palm sold 599,000 smartphones, down 13 percent year over year. This lead to the 39% in smartphone revenue mentioned earlier.

It sold 158,000 traditional handhelds during this period, and took in $21 million in revenue. This was a 5% decline from the previous quarter, but a 51% year-over-year drop-off.

In the conference call after these results were announced, Colligan commented on both the short-term and long-term prospects for his company's handhelds: "In the handheld business, it continues to sell, it's selling this holiday season. We will push those out into the marketplace as long as there is sufficient demand. One of the things that’s kind of a self-fulfilling prophecy is we're not developing new ones and so there's an inevitable end."