Palm Earnings Preview at CNBC

Posted By: Ryan Kairer Wednesday, December 17, 2008 12:57:28 PM

CNBC has posted an article focusing on the expectations for Palm's Quarterly Earnings. Palm is due to report their final Q2 FY09 earnings tomorrow after the market closes. No one really expects many positives, given that the company has already pre-announced that it expects revenue to come in at half of what was expected. However, there should certainly be some interesting discussions during the conference call around the anticipation surrounding the CES announcement and the sudden departure of Palm's CFO at a curious time.

This past year was abysmal for the smart phone maker: late-to-market products, a stock price in freefall, worries that its single biggest investor Elevation Partners may divest its stake in the company, a pricing model for the Palm Treo Pro that raised lots of eyebrows, layoffs, a new chief financial officer with little direct Wall Street experience announced Monday, and true worries about whether Palm even stands a chance as a going concern in 2009.

CNBC's Jim Goldman talks about the implications of all of this as well as the situation around the currently carrier-less Treo Pro. Despite being cautiously optimistic about Palms prospects this summer, Goldman concludes that undoubtedly, Palm still has big problems to face and states the obvious, that Palm needs to come up with something big in Vegas next month.

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Troubling news now and it only looks to get worse...

hkklife @ 12/17/2008 1:49:08 PM #

From the article:

"Worse, Global Crown Capital's Pablo Perez-Fernandez (he's got a "Sell" rating on the shares and a $1 target) is hearing rumblings that Verizon might stop selling Palm's best-performing product, the attractively priced Centro, even as Apple is taking the iPhone mainstream by getting into Wal-Mart in a couple of weeks."

Very, very troubling if true, huh?

Now, if a refreshed "Centro 2" or "Centro Pro" (Garnet-powered, of course) is waiting in the wings to replace the Centro sometime in Q1, then more that's fantastic. But if the carriers are gonna dump the Centro entirely and not going to bring in a comparable Palm product (regardless of OS) as a replacment, then all of the smoke & mirrors, spin, and strong Nova showings won't help them at all.

I've already seen the TC rumor that SV posted a few days ago (totally unsubstantiated, of course) that Sprint's going to be canning the Centro alongside the 800w. If anything, I would've expected AT&T to be the first to dump the Centro since they are frothing with iPhone & BB Bold mania these days and the GSM Centro is even more date than its CDMA brethren.

As usual for Palm, they get a solid product (original Pilot, Palm V, Treo 650, TX, Centro) and then milk it bone dry for far too long without even considering a replacement. And the 128mb Centro has only managed a "blink and you'll miss it" cameo appearance with Sprint exclusively. Last time I was in a Best Buy, they still had the "old" Centro out on display with no mention of the new 128mb versions.

Pilot 1000->Pilot 5000->PalmPilot Pro->IIIe->Vx->m505->T|T->T|T2->T|C->T|T3->T|T5->Zodiac 2->TX->Verizon Treo 700P->Verizon Treo 755p

RE: Troubling news now and it only looks to get worse...

Gekko @ 12/17/2008 1:53:24 PM #

maybe no more palmos for you VZW people? forced migration to winmob or BB?

RE: Troubling news now and it only looks to get worse...

mikecane @ 12/17/2008 2:14:33 PM #

I don't get it. I thought the Centro had done well - 2M+ sold. So why the rush to suddenly dump it? What competes with it?

RE: Troubling news now and it only looks to get worse...

joad @ 12/17/2008 2:30:16 PM #

>>What competes with it?

http://palmaddict.typepad.com/photos/uncategorized/playschool_phones_1.jpg

Paying my annual PDA update tax to Palm since 1997.

RE: Troubling news now and it only looks to get worse...

PacManFoo @ 12/17/2008 2:58:35 PM #

>>What competes with it?

http://animalid.biz/myPictures/Horse-Buggy.jpg

The last known classic PDA user.

RE: Troubling news now and it only looks to get worse...

PacManFoo @ 12/17/2008 3:08:30 PM #

More competition

http://www.wtbco.com/Misc/DSC05234.jpg

The last known classic PDA user.

RE: Troubling news now and it only looks to get worse...

AdamaDBrown @ 12/17/2008 3:26:09 PM #

At this point, almost everything competes with the Centro. On Sprint, they've got the Samsung Ace and Motorola Q9c, both of which add GPS and more memory to the mix. Verizon's got the Q9c/Q9m models, likewise. There's the basic Blackberries. And both carriers have an increasing range of dumbphones that, like it or not, are roughly on par with the Centro in terms of software and well in front of it on hardware.

Add to that the fact that each platform they offer vastly adds to a carrier's support costs, it's actually a testament to the Centro's relative popularity that it hasn't been canned long before now. But the Centro is an old phone in the fast moving retail phone world, and sooner or later it's going to cost the carriers more to support than they make off of it. Probably sooner.

On the original subject, I'd be stunned if Palm tried to debut a Centro 2 or the like running Garnet. The Centro is quite likely the last "old Palm" device we'll see out of them. Nova's the future, and their entire existence as a company depends on whether it suceeds or flops.

RE: Troubling news now and it only looks to get worse...

Tuckermaclain @ 12/17/2008 6:32:29 PM #

Palm could still make a much better device than the Centro just using Garnet.

RE: Troubling news now and it only looks to get worse...

Ryan @ 12/17/2008 6:49:56 PM #

The competition pics above remind me of Palm OS Rhinestone...

http://www.palminfocenter.com/news/6680/rumor-palmsource-to-launch-palm-os-rhinestone/

RE: Troubling news now and it only looks to get worse...

Gekko @ 12/17/2008 7:30:53 PM #

>Happy April fools! Many thanks goes out to the clever folks at PalmSource that came up with Palm OS Rhinestone!

so this is what they were working on!

RE: Troubling news now and it only looks to get worse...

SeldomVisitor @ 12/18/2008 4:27:41 AM #

> ...Palm could still make a much better device than the Centro
> just using Garnet.

Yeah, I think so, too, especially since Palm said the "roadmap" was "PalmOS" consumer, "Nova" prosumer, "WinMob" enterprise, and haven't changed that roadmap publicly.

The unknown Nova, however, might lend itself to a consumer-grade "high level" feature phone - don-t NEED programmability (other than maybe Java).

RE: Troubling news now and it only looks to get worse...

joad @ 12/18/2008 8:13:48 AM #

> ...Palm could still make a much better device than the Centro
> just using Garnet.

Yeah.... they could call it the TREO...

I guess appealing to the lowest common denominator with the Centro toy hasn't worked out very well for Palm, as they haven't provided anywhere to go once users get sick of the lousy keyboard and bad battery life.

There are a plethora of "Windoze Mobile" phones made by everyone and their mother, and in a lot of ways FrankoGarnet beats it for speed and usability.

Right now, the pattern seems to be - Centro hooks you on a smartphone, then you "graduate" to an iPhone, Blackberry, or HTC device. Palm killing the "real" Treo was a suicidal move.

RE: Troubling news now and it only looks to get worse...

palmit @ 12/18/2008 8:23:20 AM #

Centro is a great phone! Bring on the Centro II.

Typical drive-by 'journalism'

PadOPaper @ 12/17/2008 10:33:48 PM #

"worries that its single biggest investor Elevation Partners may divest its stake in the company"

in reference to a speculation piece written up by another hack that was rebutted by a statement a day later by elevation

Who needs expensive gadgets, give me a pencil and some post-its. Added benefit, perfect handwriting recognition.

RE: Typical drive-by 'journalism'

mikecane @ 12/18/2008 5:59:09 AM #

That could still happen. If Elevation sees their fat profits aren't going to happen, they'd settle for getting the hell out with their investment and some premium via a Palm acquisition by someone else. Never expect money to do anything other than what's best for *money*.

RE: Typical drive-by 'journalism'

AdamaDBrown @ 12/18/2008 6:32:27 PM #

If Elevation gets out right now, they take a HUGE bath on their involvement in Palm. The entire company is worth less-a lot less-than what Elevation Partners paid for their $25% stake. I doubt they'll make any move until after Palm unveils the new platform in January. If it looks like Palm is going to survive over the longer term, I think EP will stay in and at least try to recover their investment. If Nova falls flat, then Elevation Partners will cut their losses at some point next year, and Palm will cease to be relevant as an independent company.

RE: Typical drive-by 'journalism'

AdamaDBrown @ 12/18/2008 6:32:28 PM #

RE: Typical drive-by 'journalism'

SeldomVisitor @ 12/19/2008 4:02:16 AM #

If EP gets out now they lose everything, I believe (don't hold me to it!). The debt has to be paid off first, I think, THEN EP gets theirs THEN the common shareholders get theirs.

'CFO with little direct Wall Street experience'

freakout @ 12/18/2008 1:25:27 PM #

(snort)

'cause Wall Street experience counts for soooooooo much these days. Do they mean he has "little direct experience fuelling global financial meltdowns?"