With smartphone vendor Palm set to announce its fiscal third-quarter results tomorrow, analysts are weighing the company's prospects and debating its positioning for the future.
Palm warned in late February that it expects its revenue for the fiscal third quarter to be below analyst expectations and that its full-year revenue will be "well below" its previous estimate of between $1.6 billion and $1.8 billion. After the warning, Palm CEO Jon Rubinstein said Verizon Wireless' launch of Palm's webOS devices in late January was "below expectations," and that the two companies were working together to boost sales.
But some expect problems to continue.
"While Palm recently increased its marketing campaign and in-store training of Verizon store reps, our checks indicated continued weak sell-through trends," Piper Jaffray analyst Mike Walkley wrote in a recent research note. On average, analysts expect Palm to record shipments of around 845,000 units for the quarter, according to Dow Jones Newswires. The number is up slightly from Palm's 783,000 units in the prior period, before the company launched with Verizon.
Cannacord Adams analyst Peter Misek, who issued a warning one day before Palm issued its own, said the company faces "continued headwinds." He also said AT&T Mobility has decided to delay the launch of Palm's Pre and Pixi devices from April to June or July due to technical issues.
Representatives from Palm and AT&T declined to comment.
And as for Palm's options? Morgan Stanley analyst Ehud Gelblum wrote in a research note that the company can either spend cash to drive sell-through, continue its current course and boost marketing efforts, or perhaps license webOS.
For more:
- see this Dow Jones Newswires article (sub. req.)
- see this Barron's blog post
- see this Barron's blog post
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