Both Palm and Research In Motion are expected to increase their revenues on stronger smartphone sales when they report earnings next week. However, the vendors' margins may contract as they strive for greater market share through higher volumes.
The two smartphone makers report earnings Dec. 17, and their figures will include sales through the end of November. During that period a number of new challengers entered the market, including Verizon Wireless' Android efforts--Motorola Droid and HTC Droid Eris. And, as ever, there's Apple's iPhone.
RIM--whose two chief executives recently batted back analysts' concerns over the company's performance--is expected to see a hit in its sales at Verizon because of the carrier's strong support for the Motorola Droid. Nonetheless, analysts surveyed by Dow Jones Newswires said they expect the BlackBerry maker to ship around 9.6 million smartphone units in the quarter, up 43 percent from the year-ago quarter.
Palm, meanwhile, is expected to see a boost in revenue. The company's second phone based on its webOS platform, the Pixi, recently went on sale at Sprint Nextel, and its Pre smartphone began selling in Europe. The company is expected to post around $265.7 million in revenue, but likely will continue reporting losses.
"We believe aggressive holiday pricing from competitors, slow sales in Europe, and tepid response to the Pixi is likely to negatively affect results and guidance," BMO Capital Markets analyst Tim Long wrote in a research note.
- see this Dow Jones Newswires article (sub. req.)
Palm CEO defends webOS, criticizes Android
Analysts divided over Palm's prospects
Palm faces challenges as competition heats up
Report: RIM to benefit most from move toward smartphones
RIM execs confident despite analysts' worries