Palm's future seems to be even bleaker as an analyst told investors that he forecasts that the number of Pre sold in July would be around 100,000.
Analysts are known to be rather unreliable but Ilya Grozovsky's note to Morgan Joseph investors could cause the company's shares price to drop significantly.
The number of Pre sold in June is said to have dropped to 200,000 with August numbers expected to be significantly worse.
Previously, Grozovsky estimated that Palm would be selling around 400,000 Pre's in the three months ending August. It is now highly unlikely that this number will be reached.
Grozovsky reckons that Palm and its partners will need to slash the price of the smartphone to revive sluggish sales as the holiday season approaches.
In addition, Ashok Kumar, of financial advisory group Collins Steward, has downgraded Palm stocks afte fears that less than 300,000 handsets were sold in May and June.
Pre production is expected to fall by as much half a million units over the next four months. The drop in sales could partly be blamed on the success of Apple's new iPhone 3GS handset which was launched back in June 2009.
Poor Pre sales might also help explain rumours over an earlier-than-expected launch of the Palm Pre on O2 in October 2009. Yesterday, Palm had to defend its position as the Pre was accused of collecting too much information on its customers' activity.
The Pre is available on Sprint in the US and PDA Blast reckons that had it been on sale on AT&T or on Verizon, it would probably have fared better.