PalmSource’s Most Recent Quarter Was Not a Good One

by Reads (11,747)

PalmSource has reported that its revenue dropped substantially during its most recent financial quarter.

Revenue for the quarter was $17.2 million as compared to $21.6 million reported in the same quarter a year ago.

The reason revenue was down is obvious: far fewer Palm OS devices were shipped during the quarter. PalmSource licensees reported shipping a total of approximately 1.4 million units. During the same quarter last year, about 2 million units were shipped.

The number of Palm OS handhelds shipped has been dropping in recent months, while shipments of Pocket PCs and BlackBerries is on the rise.

Taking a Net Loss

PalmSource had a net loss of $700,000, or 5 cents per share. In the same quarter of 2004, it earned $600,000.

On a non-GAAP basis, the company had a net income of $600,000, or 4 cents per share. This figure excludes the effects of amortization of intangible assets and deferred stock-based compensation and restructuring charges.

A Company in Transition

These results include one month of financial results for China MobileSoft (CMS), the company PalmSource acquired in January.

CMS was acquired to broaden PalmSource’s product offerings. It makes operating systems and other software for both smartphones and simpler featurephones, while PalmSource has always concentrated on handhelds and smartphones.

In addition, the percentage of Palm OS devices that are smartphones is growing. In its most recent financial quarter, 23 percent of the devices shipped by PalmSource licensees were smartphones, up from just 12 percent in the same quarter a year ago.

“We continue to make progress in our plan to transform PalmSource into a broad-based software provider for all mobile devices,” said David Nagel, president and CEO of PalmSource. “With the completion of the China MobileSoft acquisition, we now have a foothold in the Chinese market with our voice, feature and smartphone products, a low cost, localized development and support capability, and the technology base to improve the competitiveness of our software products internationally.”

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