Palm announces first quarter results: $164.5m net loss, 823k phones sold
By Nilay Patel 
posted September 17th 2009 4:51PM
posted September 17th 2009 4:51PM
Palm just announced its first quarter results -- the first to really include numbers from the Pre -- and they're positive (well, depending on how you look at things), with a $2.8m gross profit on $68m in revenue. Actually, that's a little low, since Palm uses the same sort of subscription accounting for the Pre as Apple does for the iPhone, so the unofficial numbers are higher: $100.6m gross profit on $360.7m in revenue. Still, we should point out that according to GAAP (you know, the rules that matter), the outfit had a net loss in fiscal Q1 2010 of $164.5 million, while the non-GAAP net loss was pegged at $13.6 million. Although Palm wouldn't include break out specific sales data, they did say that the "vast majority" of the 823,000 phones they sold in Q1 were Pres, so take that as you will. Oh, and if you were still holding out hope for more Palm WinMo phones, it's all over -- Palm is doing 100 percent webOS development from now on. (Shocker!).Update 1: Rubinstein deftly sidestepped the question of why Pixi was launched on Sprint as opposed to another carrier, saying "They're a great partner and we're looking forward to a great holiday season."
Update 2: Asked about MOTOBLUR, Jon said "I don't know much about MOTOBLUR, but I think to build really great products, you have to control the entire experience -- you have to own the OS and the services around it."
Update 3: Jon just said "We're on a web schedule with updates -- you'll see a steady stream of updates and features."
Update 4: Revenue on accessories and anciliary products were "really very small, immaterial to overall trends." When pressed if it was in the low, single-digit millions, CFO Doug Jeffries emphasized, "very, very small."
Rubenstein said the "vast majority" of those 823K phones were Palm Pres.
WSJ says around 500K were Pres. Anyone else think that sounds a bit low? (Could Palm really have sold 323K Treos?)
Sure, when you throw in Centros. 500,000 would be the very top of analysts estimates before today's numbers.
@cashmonee,
crap, I totally forgot about the Centro, you are right.
Sure! For one, there are no shortage of suckers and two, some ppl really dont deserve (or 'need,' to be be more polite) expensive/ advanced smartphones. My so, for e.g. totally underused a certain jail-broken and totally tricked out phone. Now that its broken, guess what its replacement would be?
Thats right! Hellooooooo Centro!
/non-geek so rant
Why not give actual sales numbers for the Pre? Seems odd to say the vast majority of 823,000 and we are going all WebOS and not tout the real number of Pres. I mean majority of 823,000 puts them at the top end to well past analysts expectations. It seems like maybe they are not out of the woods yet.
And engadget, please do not try to break financial news. You obviously do not have the expertise. Let the story come out and then report, you are much better at that.
"Why not give actual sales numbers for the Pre?" well generally when you are trying to fudge the numbers, providing a straight answer gives the game away.
Looks like the palm pre has been a solid seller but not stellar.
Palm claims "confidential information" when talking about individual device sales. they always add up ALL then report the numbers/
W.r.t "Pre sales" Palm said sell-in plus sell-through of Palm devices was majorly Pre but then, upon further questioning, said they did NOT say "sell-in was majorly Pre and sell-through was majorly Pre" (paraphrases). From that it's easy to assume sell-in was almost entirely Pre and sell-through sucked, IMHO.
sell-in = sales to, for example, Sprint.
sell-through = sales by all venues (Sprint, Palm, whomever) to the end customer.
"...according to GAAP (you know, the dudes that matter)"
"GAAP" = genearlly accepted accounting principles, they are a set of rules, not people.
LMAO, that's awesome. The dudes that count, right.
This just in: Palm sales suck slightly less than expectations!
It's going to take Palm a while to turn things around. There is no such thing as a silver bullet, the iPod took a while to help Apple change their direction. Once Palm starts getting WebOS phones on all the other networks that will really help drive their growth.
@Ken Johnson
Ummm, the iPod didn't change Apple's direction, the iMac did.
@MrWhite
Ken is right it was all iPod money in the beginning. iMac did not take off until it got an Intel chip.
MrWhite is correct. By the time the iPod and Intel chips came around, Apple had already turned the corner. They were doing just fine; the new products simply sent them through the roof.
@Seven2K: Check the history books, bub. The PowerPC G3-equipped iMac is what pulled Apple out of its poorly-marketed, poorly-named computers.
It maybe a dream, but I think Palm + Nokia = really cool phones. I hope Nokia is keeping an eye on Palm.
O.K. Palm may lose $199 on each phone they sell, but they can make it up in volume.
Ummmmmmmmm if they loose 199 dollars per phone I don't see how any volume of phones sold would make that a positive number
-199x is always negative....?
But the touchstone profit margin is probably huge. They just need to get everyone to buy 8 of them for each Pre and they are set.
@Seven2k
Actually your both wrong, do you guys even know you history? Steve Jobs came back to Apple, he then introduced the Blue iMac, sales took off saved the company. Then the iPod came out later and was an instant success. iMac sales were just fine even before the Intel chips. Amazing what bad information there is out there.
Go back and look at Apple's finicials and you'll see that's not the case.
bring the pre to verizon and you'll have at least one sold...
brother has a pre, pretty awesome phone
I would buy a palm pre or palm pixi if I could.
No Sprint in North Dakota.
Just Verizon/Alltel...who undoubtedly have the worst phones.
Is it really essential to completely own the operating system? If you open source (Android?) why not just do whatever the hell you want to the OS in terms of customizing it to the hardware?
Say good-bye to Palm folks. I'd give them 18 months tops (9 is a better bet)
If you read this any other way you are kidding yourselves.
The Pre was supposed to bring Palm back into the game and although it's "nice" it's irrelevant.
Their financials are not any better than they were before. I guarantee, internally, they expected and needed significantly higher sales than they got. I gotta go so I can tell my broker to short their stock.
Okay Palm, time to move those GSM Pres/WebOS phones worldwide (including the US), and fast, like last month. Really, loosing money is one thing if you're gaining marketshare, but only having your product locked into a US only CDMA carrier (and one that are loosing customers), doesn't' bode well. We already start seeing the wave of Android phones (Moto Cliq, Samsung Galaxy, HTC Hero) coming. Regardless of how easy it is to develop apps on WebOS, if you're a developer, you'll be looking at marketshare too. The bickering with Apple regarding iTunes syncing was just a distraction and a waste of time, time that could be spent on focusing on how to respond to Android.
^losing money >_
Unless some other company keeps funding them and funding them, I don't see how they'll be able to continue operating for much longer.
Bit early to talk about results for q1 2010 maybe?
It's funny because governments always release figures 1 or 2 years old and that's always accepted as fine and dandy, but apparently companies have to release results from the future, sending in terminator bots to retrieve those one assumes.
Nice palm. You suck.
electronic cigarette
The problem is that not with the Pre, but that Palm didn't choose Verizon as a exclusive partner. Now, their dipping the well again with Sprint, who just doesn't move the number of boxes that the big two does.
I know Palm is seeing ATT=Apple, Verizon=RIM so the natural move is Sprint=Palm, but the truth is that Sprint is flirting not only with WebOS but also Android as their lead OS provider. RIM has rarely treated Verizon as an exclusive partner, so Palm really lost the chance to move RIM to the sidelines (if they ever had a real chance).