Comments on: Palm Reports Q2 FY 2010 Results

Palm, Inc. today reported that total revenues in the second quarter of fiscal year 2010, ended Nov. 27, 2009, were $78.1 million. Gross profit was $5.5 million, and gross margin was 7.0 percent. These results include the effects of subscription accounting applied to Palm webOS products as required by GAAP. In accordance with this methodology, revenues and direct cost of revenues for Palm webOS products (currently Palm Pre and Palm Pixi smartphones) are deferred and recognized over the products' estimated economic lives.

"We are continuing to execute strongly against our long-term strategy with the delivery of Palm Pixi, the new carrier launches completed this quarter, and the upcoming opening of Palm's full developer program," said Jon Rubinstein, Palm's chairman and chief executive officer. "We're still in the early stages of a long race, and we're energized by the opportunity to compete in this exciting market. We remain confident that Palm's innovative product design capabilities, integrated cloud services and the differentiated and delightful Palm webOS experience will provide the foundation for our sustained success."

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RIM in Q3: 10.1 million shipped

Gekko @ 12/17/2009 5:42:24 PM #

Key stats:

* Revenue: $3.92 billion vs. $3.78 billion consensus.
* EPS: $1.10 vs. $1.04 consensus.
* Subscriber additions: 4.4 million, vs. 4.1 million RBC est.
* Devices: 10.1 million shipped, including 75 millionth BlackBerry

Guidance:

* Revenue: $4.3 billion midpoint vs. $4.11 billion consensus
* EPS: $1.27 vs. $1.12 consensus
* Subscriber additions: 4.55 million midpoint vs. 4.45 million midpoint RBC est.

http://www.businessinsider.com/rim-crushes-quarter-guidance-strong-2009-12

Sell-Though

2klbs @ 12/17/2009 8:47:14 PM #

Did any analyst nail them down on the current *Palm* definition of what this number represents?

Also, any comments on the continued effects of price cuts on unit margin targets?

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RE: Sell-Though

Gekko @ 12/17/2009 10:51:27 PM #

i want to know -

how many pres, pixis, centros, and treos each were sold and are now currently active in Q3? if you can't tell me, what are you hiding?

RE: Sell-Though

SeldomVisitor @ 12/18/2009 3:23:03 AM #

Palm was very clear about what sell-in and sell-through mean last time around.

Sell-in is sales by Palm to those who sell.

Sell-through is (1) sales by Palm to end-customers and (2) sales of any type by those Palm sells to. Note that the latter does NOT say "sales to end-customers by those Palm sells to".

Palm explicitly said that Sprint was an 85% customer. Palm also VERY EXPLICITLY said that Sprint turns around and sells to RadioShack and BestBuy, among others.

There is no ambiguity.

Yes, that means reading ANYTHING about "Palm sell-through" is entirely bogus and almost-totally meaningless. The only partial information we get out of the bogus "sell-through" this time around is that Sprint couldn't sell to other venues.

RE: Sell-Though

jca666us @ 12/18/2009 3:34:07 AM #

Are there a million activations yet?

If not, when? If they have something substantial to announce, we'll hear it at CES.

RE: Sell-Though

2klbs @ 12/18/2009 9:30:15 AM #

SV & Gekko- any insight into the seemingly contradictory units shipped?

"Shipped 763k phones over the quarter"
"Sell-through was 573k"

Granted, this has been re-hashed from a couple news feeds, but even with Palm's fast and loose definition, it doesn't track...
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RE: Sell-Though

Ryan @ 12/18/2009 9:48:34 AM #

The transcript is online now, if you want to read the CFO's comments on this question...

http://pfavs.com/z

RE: Sell-Though

Gekko @ 12/18/2009 10:30:31 AM #

i want to know how many WEBOS devices were sold/active in Q3.

RE: Sell-Though

2klbs @ 12/18/2009 11:27:26 AM #

The units sold number of 573k was diluted by legacy PalmOS models. WebOS smartphones (read: Pre) were 80% of that number: 458.4k- yikes

"Consistent with our past reporting, sell through represents sales by our carrier partners to their customers which may include indirect sales channels"

What?
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RE: Sell-Though

SeldomVisitor @ 12/18/2009 11:41:45 AM #

2klbs wrote:
"Consistent with our past reporting, sell through represents sales by our carrier partners to their customers which may include indirect sales channels"
What?

Yup - sell-through as defined by Palm is sales by those Palm sells to and, as noted above, Palm sells to Sprint who turns around and sells to the BestBuys of the world.

RE: Sell-Though

SeldomVisitor @ 12/18/2009 11:44:10 AM #

2klbs wrote:
"Shipped 763k phones over the quarter"
"Sell-through was 573k"

"Shipped" is "sell-in".

"Sell-through" is (1) devices sold to end-customers by Palm (via Web) and (2) devices sold by the companies Palm has sold-in to., not necessarily to end-customers.

As such, the above numbers just mean Palm sold-in a whole lot more than they sold-through - the BestBuys of the world might not be buying.

RE: Sell-Though

2klbs @ 12/18/2009 11:54:23 AM #

Oh, yeah SV, I get it,

'just disappointed they continue to play the semantics game, even going so far as to "re-iterate" a thinly veiled nuance- most will assume they are indicating consumers.

I don't know why I feel so disillusioned at this point, although I accepted the cold logic of their new paradigm a while ago and its seeming inevitable result, I still have fond nostalgia when I look at all the Palm phones and PDAs and accouterments my son and daughter inherited (and use) after 12 years of my fandom.
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