Palm, Inc. has warned investors that its revenue dropped dramatically last quarter. Nevertheless, the company is confident that this won't affect the launch of the Palm Pre, its eagerly-awaited next smartphone.
In a preliminary report on its most recent financial quarter, which ended Feb. 27, Palm says its revenue was in the range of $85 million to $90 million. That's a drop of roughly 70% from the same period of the previous year, when it took in $312 million.
Palm said in a statement that this drop is "the result of reduced demand for Palm's maturing legacy smartphone products, the challenging economic environment, and later-than-expected shipments of the Treo Pro in the United States." The company expects declining revenues from its legacy Palm OS products in its current fiscal quarter, too.
It used between $95 million and $100 million to keep afloat last quarter. At the end of this period, the company had between $215 million and $220 million in cash, cash equivalents, and short-term investments.
Bring on the Palm Pre
For many years, Palm made handhelds and then smartphones based on the Palm OS. However this operating system has become quite dated, and demand for phones running it has waned. That's why Palm is switching to a new operating system it has developed itself, called the webOS. The first model based on this will be called the Palm Pre.
"The much-anticipated launch of the Palm Pre remains on track for the first half of calendar year 2009, but as expected we've got a difficult transition period to work through," said Palm President and CEO Ed Colligan. "Despite the challenging market environment, the extraordinary response to the Palm Pre, and the new Palm webOS reaffirms our confidence in our long-term prospects and our ability to reestablish Palm as the leading innovator in the growing smartphone market."
The webOS will be significantly different from the Palm OS. It will be a multi-tasking operating system with a strong focus on the Web. It will be able to wirelessly synchronize a wide variety of data with online services like Google and Facebook.
The Pre itself will feature a sliding keyboard as well as a multi-touch-capable 3.1-inch display. This device will also be equipped with 8 GB of on-board storage, Wi-Fi b/g, Bluetooth 2.1, and a 3.0 megapixel camera with LED flash.
It will be available first from the U.S. carrier Sprint, who will add its mobile broadband service EV-DO Rev. A. The Pre will likely be released in Europe by the end of this year.
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