Palm Shares Drop Amidst Yet another Q2 Loss

Palm Inc, the California-based smartphone manufacturer has registered a drop in its share prices as the company reported a fiscal 2nd quarter loss, its 10th in a row, of $85.4 million, or 54 cents a share. The share price dropped by 8.7 percent during after hours trading, to $10.7 or 37 cents a share.

The maker of Pre mobile phones has generated revenue of $78.1 million, registering a 59 percent drop whereas sales including deferred revenue were $302 million, more than the $267 million that was predicted by analysts.

The company, which is struggling to gain a standing in a market dominated by the likes of Apple and Research in Motion, has witnessed a 64 percent rise in its sales and marketing expenditure and its total operating cost has also increased by 21 percent.

Palm Inc. has rolled out phones such as Treo and Centro on top of the Pre; the latter was introduced with a new internet-based operating system earlier in January and was made available to customers in June via Sprint Nextel Corp, third largest wireless carrier in US.

However, the phone failed to gain popularity over its Apple and RIM peers as Palms market share has dropped to 1.4 percent while Apple and RIM enjoy 20.8 percent and 17.1 percent market share respectively.

Our Comments

Palm's Pre has been one of the most eagerly awaited phones at the beginning of the year but other phones, like the Droid, have taken over and it looks very unlikely that the phone will be able to offer anything new soon, unless of course, Palm has another Pre in store for us, to be released at CES.

Related Links

Palm Smartphone Sales Slip as It Struggles to Turn Around

(NY Times)

Palm posts wider than expected 2Q loss

(Google News)

Palm's losses decline for second quarter

(CNET)

Palm Drops After Reporting Wider Loss Than Analysts Predictedotted

(Bloomberg)