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Summary:

Like a desperate gambler down to his last few chips, Palm is ditching Windows Mobile and going all in with its own webOS. But the company will have to find a way to boost sales of its Pre and the upcoming Pixi if it hopes to […]

Like a desperate gambler down to his last few chips, Palm is ditching Windows Mobile and going all in with its own webOS. But the company will have to find a way to boost sales of its Pre and the upcoming Pixi if it hopes to stay in the smartphone gpalm-preame.

The move to end the five-year relationship with Microsoft’s mobile operating system was as predictable as it is logical. Windows Mobile continues to lose market share to consumer-targeted platforms such as the iPhone and RIM’s BlackBerry, which has deftly expanded beyond the enterprise. And while the dusty WinMo platform is direly in need of a makeover, webOS has drawn generally positive reviews as a worthy competitor in the smartphone space.

Palm failed to disclose exact figures but said the Pre — which launched on Sprint’s network June 6 — accounted for the “vast majority” of the 823,000 units it shipped during the quarter, presumably placing Pre sales in line with analysts’ forecasts of roughly 500,000 units. As expected, Palm received a bit of a bump from the Pre: while quarterly shipments were down 30 percent from the year-ago period, they more than doubled from the prior quarter.

The Pre’s momentum seems to be dissipating already, however. Palm said it expected revenue for the current quarter to come in between $240 million and $270 million, well short of Wall Street’s expectation of $344 million. The company’s quarterly loss can be partially attributed to the fact that Palm defers much of the revenue from Pre sales, but Palm also announced plans to sell 16 million shares of common stock to shore up its $200 million-plus in cash reserves — an indication that it plans to eat through more of its bankroll in the near future.

Palm should get another boost from the Pixi, an affordable webOS-enabled device aimed at younger users that will launch with Sprint in time for the holidays, and there’s a chance that Verizon Wireless will play the role of Palm’s redeemer with its expected launch of the Pre early next year. But Apple and RIM continue to gain momentum, and a slew of Android handsets are coming to market in the next year. If Verizon — or another heavy-hitting carrier — can’t come to the rescue in the next several months, Palm’s investment in webOS won’t do much to reverse its fortunes.

  1. “Like a desperate gambler down to his last few chips, Palm is ditching Windows Mobile and going all in with its own webOS. But the company will have to find a way to boost sales of its Pre and the upcoming Pixi if it hopes to stay in the smartphone game.”

    Dear Gibbs,
    You might want to add the following , PALM total employees are 30 times smaller than APPLE, about 10 times smaller than RIMM and about 20 times smaller than GOOGLE.

    The rest of the players ( SAMSUNG , MICROSOFT , NOKIA) have too many employees than PALM.

    With such a small number of employees , (about 1000 ), PALM cannot support multiple platforms.
    Besides they have to work on the upgrades of WebOS plus spend time on marketing.

    That is the main reason.

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  2. I think it’s a little too early to be putting the nails in Palm’s coffin. So the Pre didn’t make a huge impact out of the gate like the iPhone did. (Palm also doesn’t have millions and millions of zombie followers that will buy a product just cause their name is on it.) I don’t remember Blackberry being a monstrous success out of the gate either. (Of course, sometimes my memory fails me.) If Palm has a good product there will be plenty of room in the expanding mobile market for a number of major players. Only time will tell.

    NOTE: The comments expressed here are biased as I own a Palm Centro and personally hope the Pre/Pixie products are as good or better. I would like to see Palm stick around for a good long while yet.

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    1. Couldn’t agree with you more. The PALM of today is RIMM of 2002

      I hit up on this info, which says RIMM had 1400 employees in 2002.

      http://www.ethicscan.ca/products_services/research/company_information_reports/EthicScan_Profile01.pdf

      Motorola did abandon the WinMo Support.

      And hired Android programmers.
      http://developers.slashdot.org/article.pl?sid=08/10/04/139226

      PALM Pre is in its own league in the software (UI) side, the hardware could be improved up on. Jon & Co can come up with a rock solid update in a year or so.

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      1. “The PALM of today is RIMM of 2002″ – really? Then who is the Apple of 2002?

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  3. well there only one way start selling Pre at big numbers ….introduce it to India and china market at reasonable price point without any carrier just like nokia ….in these market iphone is non existant and only player they will find is nokia and rim

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    1. at what price point ?
      Nokia’s phones are cheap ones , and the expensive ones like N97 are sold not that much.

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  4. [...] Palm Kills WinMo as Pre Loses Momentum | GigaOm Trying to stay afloat in the smartphone market, Palm is ditching Windows Mobile and placing its bets on its own webOS. Windows Mobile has been losing market share, this move ends their five year long relationship. [...]

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  5. Based on their size (as well as their hopes and dreams), this does not surprise me at all. I was expecting this from Palm. I got a Pre the day it came out and had it for 3 weeks. I did not like th hardware and did not want to wait on some of the core software improvements I thought it needed (for me anyway). But I was really impressed with the core functionality of webOS. Hopefully it will survive and evolve over the next year and I may come back to it.

    But the bigger issue is market penetration. They need to get it out to more carriers globally. I really thought the Pixie was going to be on another carrier but Sprint gets first dibs on that one too.

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  6. This article is short sighted.

    Palm has only released one WebOS device, in one carrier in one country. Their GSM release is coming up and that will greatly expand WebOS market footprint. I also assume that not too long from now you´ll start seeing many more WebOS devices all over the place.

    It takes a lot of effort and time to get a new platform on the market and convince people to get onboard. Developers,consumers.. WebOS is a great platform, Palm has extensive experience pumping out handsets into the market, they should do just fine, give them some time.

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  7. [...] post: Palm Kills WinMo as Pre Loses Momentum By admin | category: palm software | tags: came-out, core, did-not, the-core, the-day, [...]

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  8. [...] for Microsoft’s Windows Mobile operating system, and they may be looking bad for Palm, too. As GigaOm notes: "Like a desperate gambler down to his last few chips, Palm is ditching Windows Mobile and [...]

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  9. Waitingfor Thenextshoe Saturday, September 19, 2009

    Minor correction – Palm management said the Pre was the “vast majority of the sell-in and sell-through activity”. When an analyst questioned that by saying “you mean the Pre was the vast majority of sell-in and the Pre was the vast majority of sell-through” management (CFO) said “We didn’t say that; we said it was the vast majority of sell-in and sell-through activity”.

    Though they didn’t give any of the crucial Pre numbers, we can assume the sell-IN was for sure “vast majority Pre”. However, their denial of what was said shouts out that the “vast majority of sell-THROUGH” for sure was NOT Pre. The math, of course, still works out to give Pre “vast majority” status if the sell-in numbers were heavily Pre (for bogus example: total “activity” was 1,640,000. If Pre sell-in was 600,000 and Pre sell-through was 400,000 then total Pre activity would have been 1,000,000 which one could ambiguously call “:vast majority”. Yes, that sell-through is horrible.

    Another aside – the analysts gave a huge range of estimates but, more importantly, some were talking sell-in and some were talking sell-through. You had to read carefully, usually more than one source, to figure what they were in particular talking about.

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  10. Another iphone killer runs into the wall. I don’t doubt that there will continue to be a niche market for the pre, but it is only going to play catchup to Apple indefinitely, since it tries to sync with itunes and uses that as a marketing play. Apple will just keep throwing them curveballs and so they are left stranded on the W7 platform, which is a big question mark. If I HAD to use W7, I would want the pre, since it is the most aesthetically pleasing version of a non-Apple OS.

    but fortunately I don’t.

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