Palm expects disappointing third-quarter figures

Palm is pinning much of its hopes on the Pre

Palm has announced that it is expecting to report disappointing financial results for its third quarter.

Preliminary figures released by the firm show a decline in revenues, which Palm attributed to a fall in demand for its smartphone products, the general financial slowdown, and a delay in delivering Treo devices to the US market.

However, the company believes that the upcoming Palm Pre could turn its fortunes. The new device is on schedule to be released by the summer, and has been a source of financial confidence at the firm.

Palm also expects revenues to be buoyed by demand for its webOS mobile operating system, and complementary services and applications.

"The much anticipated launch of the Palm Pre remains on track for the first half of calendar year 2009, but as expected we've got a difficult transition period to work through," said Palm president and chief executive Ed Colligan.

"Despite the challenging market environment, the extraordinary response to the Palm Pre and the new Palm webOS reaffirms our confidence in our long-term prospects and our ability to re-establish Palm as the leading innovator in the growing smartphone market."

Palm expects to report revenues of about $90m (£64m) for the third quarter, but analysts were expecting almost twice this amount. The company will report its complete third-quarter financial results on 19 March.