Palm has announced the financial results of the first quarter of the 2010 fiscal year (ending August 31 2009), and the company has beaten estimates and has seen a strong increase in sales (but only quarter-over-quarter). However, Palm is still seeing losses, but these losses were less than expected. During the conference call following the presentation of the results, Palm CEO Rubinstein also announced that Palm will completely abandon Windows Mobile in favour of the webOS.
The number everyone was waiting for was the number of Pre smartphones the company had shipped during this quarter, but this question was not answered – at least not directly. They only gave the total number of smartphones sold: 823000, up 134% from last quarter’s 351000 units, but a 30% decrease over the same quarter last year.
While we can’t know for sure the exact number of Pres sold, we can still make an educated guess based on simple mathematics. Last quarter, Palm sold 350000 smartphones (rounded down). Reports indicate that about 70000 of those were Pres stuck in channel, meaning that 280000 non-Pre smartphones were sold last quarter. In the press release, Palm mentions a decrease in demand for what it calls legacy products, so let’s take a conservative decline of 10% over the first quarter, leaving us with about 250000 non-Pre smartphones sold. This means that Palm sold 823000 – 250000 = 573000 Pres. This is well above the estimates of most analysts, but obviously bear in mind that this is just an educated guess.
Looking at the cold and harsh figures, things get a little confusing with all this GAAP and non-GAAP stuff. Since I don’t want to make any mistakes, let me just copy what CNet had to say:
But even though sales of the Pre were strong, Palm still ended up losing $164.5 million, or $1.17 per share in its fiscal first quarter. Still, the company’s losses beat analyst expectations. Excluding items, the company posted a loss of 10 cents a share. Analysts had predicted a loss of 25 cents a share, according to Reuters.
Palm’s sales declined to $68 million. But on a non-GAAP basis, revenue came in at $360.7 million. Wall Street analysts had predicted between $289 million and $297 million.
With sales of Pres this quarter coming mostly from a single carrier in a single country, this isn’t all that bad. The Pre has been launched in Canada too now, and Europe is right around the corner, as is the holiday season and the launch of the Pixi.
Palm’s CEO John Rubinstein also took this opportunity to announce that Palm is dropping Windows Mobile. While they will continue to sell the current crop of Windows Mobile-based Treo devices, all research and development will be focussed on the webOS, and all future products will use the webOS.