Palm smacked by poor results

Despite glowing reviews, sales of the Palm Pre have been lacklustre

Palm has posted net losses of $22m (£14.5m) for the third quarter of fiscal year 2010 as the company continues to struggle in the mobile market.

Though bad, the figure compares favourably with the whopping $98m (£64.8m) loss the company posted for the same period in 2009.

Palm's revenues were also cause for some optimism, being quite a bit better than expected at $349.9m (£232m) compared with the company's revised forecast of between $285m to $310m announced in February.

However, more worrying for the firm was the fact just 408,000 of 960,000 units shipped to distributors were sold. This represented a drop of 29 per cent from the second quarter and 15 per cent from the same period in 2009.

Jon Rubinstein, chairman and chief executive officer, admitted that the company had underperformed recently and said this was "very disappointing" but added that he thought the potential for Palm remains strong.

"The work we're doing to improve sales is having an impact, we're making great progress on future products, and we're looking forward to upcoming launches with new carrier partners," he said.

Rubinstein added that the company's new webOS platform would give it a unique advantage that would help it recover.

Adam Leach, devices and platform practice leader at Ovum, said that Palm was suffering from a lack of brand awareness, especially when considered against the competition.

"Companies like Apple and RIM [Research in Motion) have really built up a large number of followers based on their brands. Palm just hasn’t managed to do the same, even in its home market of North America," he said.

"Smartphones are a rising market at the moment and it's a shame that it appears to be the only firm not selling."

Leach added that Palm will be particularly disappointed by its low sales given that the Palm Pre device was garnered rave reviews on its launch. However, he said Palm wasn't done yet and could see a change in its fortunes.

"Palm is probably seeing a reduced expenditure on development at the moment and the opportunities in the market are still there. If the company identifies where it is going wrong and the backers of Palm show confidence in the company, it could well turn the situation around," he said.