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Palm Q4 FY09 Conference Call Highlights

New Palm Inc LogoPalm Inc. today reported their eighth straight quarterly loss as the new CEO Jon Rubinstein led the investor quarterly conference call. Palm posted a net loss of $105 million dollars on total revenue of $86.8 million. Smartphone sell-through came in at 460,000 units, down slightly from last quarter but down a tremendous 50% from the same period last year.

Newly crowned CEO Jon Rubinstein began the call with the opening script. He started off saying that after two years as Executive Chairmen he is very excited to start as CEO. He personally thanked Ed Colligan, especially for his work over the past two years and went over some of Palm's recent transformational accomplishments.

Rubinstein remarked that he is pleased with the Pre launch and he personally visited a number of Sprint stores in recent weeks. He said demand is "strong and growing" and the customer response so far "has been simply great."

On webOS he stated his belief that its is the platform that best takes advantage of the "benefits of web 3.0 better that any other platform out there today." He also dropped some stats on the current state of smartphone penetration, saying globally they make up 11% of sales, and are at 19% in the US and that these numbers are expected to double by 2013.

A lot of time was spent on the current status of the software development kit (SDK) for webOS. Rubinstein said that Palm is about to turn it over to thousands of more developers and that they are working "measured and methodically" on improving it for wider release later this summer.

He stated that they are working to ensure webOS is a world class app platform and that initial developer interest has been strong. Ruby also further elaborated that they are still tweaking the kit based on developer feedback and they don't want to rush it out. He also hinted at an improved experience for the App Catalog along with some sort of community based app recommendation system.

Rubinstein wrapped up his opening comments proclaiming that webOS represents a breakthrough in mobile product design that will provide enhanced capabilities for a decade of innovative devices and applications." saying that the Pre is just the first product in the pipeline.

Both Rubinstein and the CFO Doug Jeffries repeatedly refused to provide any specifics on Palm Pre sales numbers, gross margins, new carrier partnerships or even any guidance for future quarters. They also dodged questions on the future of the Windows Mobile platform at Palm and when any future Pre launches would happen.

Mr. Jefferies did say that the company hopes to be "cash flow positive" in the second half of 2010. He tried to play down questions on Palm's current capital situation and stated they are making investments to return to long term success.

The CFO did note that handhelds still contributed some "marginal revenue" however it was so low that he would not even break down the numbers. Mr. Jefferies went on to say that Palm is no longer manufacturing handhelds and is focusing all of its resources on smartphones. Last quarter, the company only sold about 100k units.

The following clip is from Rubinstein's opening remarks talking about webOS and its future potential.

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Another celebrity death today!

mikecane @ 6/25/2009 5:57:19 PM # Q
McMahon, Fawcett, Jackson ... and now the standalone PDA!

>>>Palm is no longer manufacturing handhelds

R.I.P. PDA

RE: Another celebrity death today!
Gekko @ 6/25/2009 6:21:50 PM # Q

MikeCon - it's amazing that YOU have managed to beat the Reaper for this long. i would have thought that the daily diet of microwave pizzas and pepsi, dodging city traffic in converse all stars, and continuous exposure to pathogens from public restrooms and public transportation would have hit their mark by now.
RE: Another celebrity death today!
Gekko @ 6/25/2009 6:28:42 PM # Q

>>>Palm is no longer manufacturing handhelds

yes - and in other news - buggy whips, 8 Track Tapes, VCRs, Polaroid film, and Floppy Disks are no longer being manufactured either. welcome to 2005.

RE: Another celebrity death today!
hotpaw4 @ 6/25/2009 8:34:56 PM # Q
Meanwhile, Apple has been busy selling over 20 million iPod Touch handhelds (connected media organizers), even though its basic PIM usability pretty much s*cks compared to, say, a Palm V.


RE: Another celebrity death today!
Scott R @ 6/25/2009 8:42:30 PM # Q
Right, the iPod Touch demonstrates that it can be done successfully. Palm just didn't have a clue. They rested on their laurels for far too long and now Apple is eating their lunch. I do think that focusing on only non-phones is a dumb idea (hello Tapwave), but if you can pull off a somewhat successful smartphone, ripping the cell phone out and selling the product as a handheld, too, seems like a no-brainer. Apple is doing it quite successfully. Palm/Handspring could have done it with the Treo line, and now Palm ought to do it with webOS (once they get the QC issues worked out with the pre and get a useful SDK released publicly).
http://Tapland.com
- Tapwave Zodiac News, Reviews, & Discussion -
RE: Another celebrity death today!
Winterbay @ 6/26/2009 12:21:53 AM # Q
On the other hand iPods are one of the worlds most annoying piece of hardware ever. I use mine beacuse I got it for free, but it frustrates me every time and when I get my Pre (as soon as it get launched somewhere where I can buy it) I will stop use it and donate it to someone that wants it...
RE: Another celebrity death today!
Gekko @ 6/26/2009 4:00:14 AM # Q

false comparison. 99.9% of people who buy IPODs do not buy them as PDAs - ie no PIM. they are the Sony Walkmans of 2009. they are bought to be media players. apples vs. oranges.

**********make an IPOD with PIM only and NO MEDIA capability and see how many you sell. and so proves my point.****************

if there was a market for stand-alone PDAs, somebody would fill it and get rich. but that's the beauty of capitalism. nobody wants them so nobody makes them.

no please stop with this silly argument.

RE: Another celebrity death today!
BaalthazaaR @ 6/26/2009 7:02:04 AM # Q
Gekko wrote:
if there was a market for stand-alone PDAs, somebody would fill it and get rich. but that's the beauty of capitalism. nobody wants them so nobody makes them.

You never know when the market is about to speak... Access is (unofficially maybe) researching the market's interest in a PDA running GarnetOS.

Seriously though, how many companies try to force their customers to transition into their "newer product" by discontinuing the old product and ending support for it? Those that try to shape the market always use statistics to show that there is no more market for the existing product even when new != better.

RE: Another celebrity death today!
nastebu @ 6/26/2009 8:20:41 AM # Q
Actually, it seems to me that the market has been pushing Apple to make the iPod Touch more PDA like. When it first came out it was determined to be an iPod only-Apple left off the email and calendaring applications. Now they are positioning it as much as a games device/app store thing than an iPod.
RE: Another celebrity death today!
mikecane @ 6/26/2009 9:00:01 AM # Q
>>>MikeCon - it's amazing that YOU have managed to beat the Reaper for this long.

Hey, H1N1 - before anyone sounded the alarm in Mexico - nearly suffocated me to death this year. That damn well had better given me immunity for this winter's Second Wave - or the Second Wave will do it. And no, I already told you I won't put you in my Will.

And Gekko is *finally* right - the standalone PDA is dead. Even I wouldn't want one now.

RE: Another celebrity death today!
hotpaw4 @ 6/26/2009 9:09:48 AM # Q
There is a market demographic that is currently buying iPod Touch's, and never using them for music or videos, and it's bigger than you think (it might even be larger than the total number of Pre's sold this year).
RE: Another celebrity death today!
DarthRepublican @ 6/26/2009 5:13:30 PM # Q
if there was a market for stand-alone PDAs, somebody would fill it and get rich. but that's the beauty of capitalism. nobody wants them so nobody makes them.

This is precisely the attitude that has GM and Chrysler begging for government handouts while Nissan, Toyota, and Honda eat their lunch. They claimed for years that there was no market for fuel efficient cars even as other companies sold them in large numbers as gas prices rose. The situation with the iPod Touch is similar. It may not be a real PDA but if even one percent of its users use it that way, that's some $40 million in revenue that Palm is ceding to Apple by not even trying to make new PDAs.

The Palm Pre is an excellent template for a next generation Palm PDA. Take away the cellular radio, GPS, keyboard, and slider, add a virtual keyboard or even some sort of "Graffiti 3" handwriting language, boost the screen size to 3.5 inches, and sell it for $200-300 like the Palm TX. It might not sell in huge numbers but it would sell and it would be cheaper to make than the Pre. And it would satisfy the "I don't need no steenking data plan" types who would finally keep whining about the lack of a new Palm PDA.
Screw convergence
Palm III->Visor Deluxe->Visor Platinum->Visor Prism->Tungsten E->Palm LifeDrive->Palm TX->Palm Pre
Visor Pro+VisorPhone->Treo 180g->Treo 270->Treo 600->Treo 680->T-Mobile G1->Palm Pre
http://mind-grapes.blogspot.com/

RE: Another celebrity death today!
twrock @ 6/27/2009 5:34:32 PM # Q
Some of us simply have wanted a PDA that makes phone calls. I see that as a very different device/OS from what Palm is offering in the Pre/webOS. webOS really is designed to be connected to the web all the time. It is a "cloud computing" model vs. a personal computing model. You could see where this was going long before they released the Pre. I knew I didn't want the Pre, regardless of its form factor, because the entire system was not the way I wanted to use my handheld computer. It certainly is the way that many people want to use their's, and so it isn't necessarily a bad model for Palm to use. It's just not the model for me.

If Palm had instead developed an OS similar to Garnet, but have included stable multitasking (the GUI of webOS might have even been a good addition), and then put that into a revamped TX form factor, I'd have been all over it. But they didn't.

If all those uber cool "connected" features of the Pre/webOS are not what you want, then don't bother buying the Pre or any other Palm product in the future. That's not where they are headed. Why would you buy a Ferrari if what you wanted was to haul construction tools around?

And unfortunately no matter how hard I try to love the iPhone or iPod Touch, Apple is no better. What's the point in having to buy into the whole Apple system (iTunes, etc.) just to own a smartphone that can't compete with the basic PIM function of my almost four year old TX? I might be able to live without true multi-tasking, but all the other crap you have to put up with is just unbearable. (OT: If there had to be a monopoly, I'm glad it was Microsoft that took over the PC world; just imagine a world where it was Apple. There'd be only one way to do everything.)

Your battle is not just with the manufacturers either. It has to do with how you want to use your "smartphone" how the carriers want you to use them. Manufacturers have to build phones the the carriers (the "orifices") will choose to add to their line and sell. There's no point trying to build a phone that none of the carriers want to carry. The carriers want you to buy an increasingly large "package" of time. Smartphones are just another way of locking you into a bigger monthly bill. Phones that rely on "cloud computing" for their data are even better.
(See also rpa's "data plans" post below.)

When someone sees the "smartphone" that really is a PDA with a cell radio, please come back and let me know. I've been waiting for a long time now for one. (And it should go without saying that I personally require a >3.5" touchscreen on the device.)

Hey Palm! Where's my PDA with Wifi and phone capabilities?

RE: Another celebrity death today!
mikecane @ 6/28/2009 9:55:17 AM # Q
There's no escaping a connection and at least *some* integration with the Net, period. It makes sense - we can argue about how *far* the integration should go, but the connectedness is now a given, period.

Have you looked at the vids for the new HTC Hero? Looks like the first Android OS phone worth considering.

RE: Another celebrity death today!
rpa @ 6/28/2009 10:29:16 AM # Q
In the US the carriers control everything: available models, allowable features and even prices (does anyone really believe there is no collusion between carriers?). I bought my Centro in Hong Kong for about $300 and pay about $17/month there for 900 minutes. Contrast this with T-Mo where I got a "free" dumb phone with a 300 minute plan at $50/month. Total costs over a 2 year period: $504 in Hong Kong and $1200 for T-Mo. I now use a pre-paid T-Mo SIM card and dropped the 2-yr plan ripoff. Sorry, somewhat OT....

twrock: I would like a redesigned Tx with voice or a Pre with Access....

RE: Another celebrity death today!
twrock @ 6/28/2009 9:10:55 PM # Q
mikecane wrote:
There's no escaping a connection and at least *some* integration with the Net, period. It makes sense - we can argue about how *far* the integration should go, but the connectedness is now a given, period.

Well, yes and no. No, I don't have a data plan, so I don't ever connected to the web with my phone. If I want to connect to the web while I'm "mobile", I find a Wifi spot and use my TX. But yes, even I can imagine that it could be useful every once in a great while. But I would want to be in complete control of when and what that is and isn't. And I do not want to be forced into any particular data plan by anyone. With my current feature phone, a data plan was completely optional. Of course I paid a higher initial price for the phone, but spending an additional $50 at the beginning vs. signing up for even the cheapest data plan so I could have the phone for free was a huge savings.

mikecane wrote:
Have you looked at the vids for the new HTC Hero? Looks like the first Android OS phone worth considering.

It is a pretty looking thing. But that screen is still too small! No doubt that if my TX dies tomorrow and I'm forced to do something drastic, the Hero (or the Samsung i7500) would be really high on my list of potentials. But I'm hoping that if the "planned" Android devices start to materialize by the end of 2009, I'll have a lot more choices.

Since I have to eventually give someone my money, it might as well be to a "system" that is more open than the others.


Hey Palm! Where's my PDA with Wifi and phone capabilities?

RE: Another celebrity death today!
twrock @ 7/1/2009 4:39:14 PM # Q
Not completely off topic, but definitely out in left field somewhere......

http://phandroid.com/2009/06/30/dell-android-device-not-a-phone/

So Dell "might" be making a non-phone handheld device with Android, bypassing the cell carriers, marketing directly to end users....... Hmm, sounds an awful lot like what a few people around here were suggesting Palm could do with its new OS.

Hey Palm! Where's my PDA with Wifi and phone capabilities?

RE: Another celebrity death today!
mikecane @ 7/2/2009 7:25:25 AM # Q
>>>I find a Wifi spot and use my TX

The hell with that. Try that crap when the wind chill is below zero F outside and you look for a place to etherjack. I have. Never, ever again. Always-connected wins, period.

RE: Another celebrity death today!
twrock @ 7/2/2009 4:14:11 PM # Q
mikecane wrote:
>>>I find a Wifi spot and use my TX

The hell with that. Try that crap when the wind chill is below zero F outside and you look for a place to etherjack. I have. Never, ever again. Always-connected wins, period.

Or you could just move to a sub-tropical island that's on the leading edge of technology and you won't have any of those silly problems. :-)

Hey Palm! Where's my PDA with Wifi and phone capabilities?

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data plans

rpa @ 6/27/2009 10:01:11 AM # Q
"And it would satisfy the "I don't need no steenking data plan" types who would finally keep whining about the lack of a new Palm PDA."

I don't want a data plan as I travel internationally 50% of the time and roaming costs would kill me. I would be happy with an improved Centro (one that didn't freeze with an incoming call) as the phone (when it works) and PDA combo suits my needs. The Pre apparently needs an unlimited data plan from what I can surmise online so the Pre is a non-starter for me.

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