Palm To Close All Its Retail Stores *UPDATED*

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In another cost-cutting move by the cash-strapped smartphone maker, Palm Inc. is shutting down the line of retail stores that it has operated since 2002.

PalmMore recently, the company made an expanded push in 2004 through 2006 to open many new stores, including one in New York City’s Rockefeller Center.

The shutdown affects all 30 Palm locations nationwide, including airport kiosks. The company did not specify a timeline, but rumors state that the stores will be closed by the end of January, one week away.

UPDATE: When Palm shuts down its stores, the closure will not affect the Palm-branded airport kiosks. These are not actually owned by Palm, but are operated under its brand by a company called Airport Wireless, and are therefore unaffected by Palm’s recent decision to shutter its retail operations.

Commenting on the rumors that had been circulating previously, a company spokesman offered the following statement: "We continue to focus our company around core business initiatives and are consolidating more resources behind fewer programs in order to compete most effectively and build world-class, category-defining mobile solutions.

"We have therefore made the decision to close our retail stores."

Retail Outlets’ Poor Reception

Palm’s retail stores famously suffered from a lack of clear direction, due in part to the company’s extremely limited product line, which forced the stores to have only a limited stock of devices and accessories. Many customers also complained about the lack of knowledgeable and attentive staff.

Latest Cost-Cutting Measure

Recently Palm has been making a number of moves to reduce its overhead as the company tries to fight its way back from two quarters of losses. The closure of the retail stores follows a round of layoffs at the company that quietly took place just before Christmas, likely resulting from the $30 million dollar revenue shortfall for the previous quarter.

Analyst expectations for Palm’s current quarter place the company on track for another loss of 14 cents per share, or approximately $15 million dollars. Shrinking profit margins on the company’s smartphones, increased competition, and market commoditization are considered major factors in the company’s decline in income despite cost-cutting and increased device shipments.


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