Palm smartphone sales slump by 29%

Paul Nesbitt

Smartphone minnow, Palm, which makes the Pre and Pixi handsets has revealed that only 409,000 models were bought by customers, rather than the 600,000 the company had projected for the company's fiscal quarter, ended 26 February.

The unit sales represented a 29% decline on sales compared to the same period a year earlier.

While its new generation of webOS-based smartphones, the Pre and Pixi models, have garnered positive reviews Palm's sales remain tiny compared to rivals like Apple, which sold 8.7 million iPhones during its most recent quarter.

According to ComScore, Palm has lost market share to smartphones running Google's Android OS.

"Our recent underperformance has been very disappointing, but the potential for Palm remains strong," said Palm CEO Jon Rubenstein, who used to be in charge of hardware at Apple.

Palm has been frequently rumoured as a takeover target for companies like Dell, who want to quickly gain a foothold in the smartphone market.

'We believe Palm's troubles will only accelerate as carriers and suppliers increasingly question the company's solvency and withdraw their support,' wrote analyst Peter Misek of Canaccord Adams, in a note to clients.

'With what appears to be roughly 12 months of cash on hand, an accelerating burn rate, a complete lack of earnings visibility, and substantial debt and preferred equity, we no longer see any value in the company's common equity,' he warned.