November 27th, 2006
Treo 750 delay dings Palm
Palm is paying the price for the Treo 750 delay.
The company said its fiscal second quarter results ending Dec. 1 will fall short of expectations. Palm said its sales will be in the range of $390 million to $395 million. Previous projection: $430 million to $450 million.
The culprit: The certification process for the Treo 750 has been delayed. As a result, the company will report net earnings of 10 cents to 11 cents a share compared to earlier guidance of 15 cents to 18 cents a share.
Excluding charges and other items, earnings will be 15 cents to 16 cents a share compared to guidance of 20 cents to 23 cents a share.
Palm CEO Ed Colligan said:
"Smartphone sell-through across our existing products is strong, reflecting solid business fundamentals in the face of significant competitive pressure. However, our Q2 FY07 revenue will be constrained by a delay in certification of a key product. We now expect to start shipping the Treo 750 for the U.S. market early in Q3 FY07. Our Treo 750v launch in Europe is doing quite well, and we expect international revenue for Q2 FY07 to be strong."
While all that may be true watch Palm's results closely. The company is under fire in the smartphone market from the likes of Motorola. I was pondering a Treo, but Motorola Q's $99 deal with Verizon Wireless won me over. Pricing pressure is also an issue.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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