Centro a Bright Spot in an Otherwise Bad Quarter for Palm

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Palm started off its quarterly earning announcement with the good news: thanks to strong demand for the Centro, it sold a record number of smartphones. The 833,000 units from Nov. to Feb. was up 13 percent year over year, bringing in $275.4 million in revenue.

Unfortunately for Palm, much of the rest of its report was bad news.

The company posted a net loss  for the quarter of $31.5 million, or 30 cents per share. In the same quarter a year ago Palm made $11.8 million, or 11 cents per share.

Its overall quarterly revenue was $312.1 million, down from $410.5 million in the same period of a year ago. 

During a conference call after this announcement, Palm executives credited much of this revenue decline to a number of factors. One of these a shifting emphasis on the low-cost Centro, which brings in less money per unit. In addition, demand is slowing for Palm’s older Windows Mobile-based Treos. The company believes that increasing sales of the Centro and the new Treos running Windows Mobile it plans to release later this year will increase revenue.

Hard Times for Palm

The company has been struggling in recent quarters as it tries to fight off increasingly strong competition in the smartphone market.

Still, there are a few bright spots, chief among these is its new consumer-oriented Centro smartphone, which debuted on a second carrier during the company’s most recent financial quarter.

"Centro is off to the strongest start of any smartphone in Palms history," said Ed Colligan, Palm president and CEO. "Centros fun design, great price point, and amazing array of easy-to-use features is expanding Palms customer base with more than 70 percent of Centro buyers trading up from traditional cell phones."

And the company is in the process of creating a Linux-based replacement for the aging Palm OS, but the first smartphones running this aren’t scheduled until 2009. Palm executives said today that it is on schedule with this project.

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