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Palm stock tumbles 20% on smartphone outlook

By David Goldman, staff writer


NEW YORK (CNNMoney.com) -- Palm's shares fell nearly 20% Thursday after the company's CEO said 2010 sales would be "well below" its forecasts, citing worse-than-expected sales of its new smartphones.

Despite the hype surrounding Palm's (PALM) new Pre smartphone, very positive reviews and a recent deal with No. 1 mobile carrier Verizon Wireless to sell the phone, Pre sales have been lackluster. In the third quarter of 2009, Palm shipped 783,000 Pres, compared to 8.7 million sales of Apple's (AAPL, Fortune 500) iPhone in the same time period.

As a result, Palm said it expected its revenue this year to fall far below the $1.6 billion to $1.8 billion that the company had previously predicted.

"Driving broad consumer adoption of Palm products is taking longer than we anticipated," said Palm Chief Executive Jon Rubinstein in a statement. "Our carrier partners remain committed, and we are working closely with them to increase awareness and drive sales of our differentiated Palm products."

Palm began to sell the Pre in January 2009, and the smaller Pixi smartphone in November. Both had been initially been offered exclusively on the Sprint (S, Fortune 500) network. Verizon (VZ, Fortune 500) began to sell the Pre and Pixi last month.

Verizon's flagship phone is the Motorola (MOT, Fortune 500) Droid, which run's Google's popular Android platform. New releases of BlackBerry devices and Google's (GOOG, Fortune 500) much-hyped Nexus One phone have also largely overshadowed the Pre in recent months. To top of page

Index Last Change % Change
Dow 18,308.15 164.70 0.91%
Nasdaq 5,312.00 42.85 0.81%
S&P 500 2,168.27 17.14 0.80%
Treasuries 1.61 0.05 3.28%
Data as of 1:34am ET
Company Price Change % Change
Procter & Gamble Co 89.75 1.52 1.72%
Bank of America Corp... 15.65 0.49 3.23%
Chesapeake Energy Co... 6.27 0.15 2.45%
Wells Fargo & Co 44.28 -0.09 -0.20%
Cognizant Technology... 47.71 -7.29 -13.25%
Data as of Sep 30
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