Palm Lowers Sales Expectations, Shares Plummet

The result of a market crowded by bigger competitors. Palm has taken a thorough beating today on the NASDAQ, as shares plummeted nearly 20%. The reason? Palm had to adjust its sales forecasts downward for the third quarter of the 2010 fiscal year, and, well, investors don’t like that.

Palm’s stock had been going up and down rather sharply the past few days, and the web was filled with negative rumours. The company put out a press release today in which it lowered sales forecasts by more than 25%.

“Palm webOS is recognized as a groundbreaking platform that enables one of the best smartphone experiences available today, and our work to evolve the platform and bring industry-leading technology to market continues. However, driving broad consumer adoption of Palm products is taking longer than we anticipated,” said Jon Rubinstein, chairman and chief executive officer, “Our carrier partners remain committed, and we are working closely with them to increase awareness and drive sales of our differentiated Palm products.”

It’s the sad and painful truth. The webOS has seen almost universal acclaim, but it would appear that so far, Palm is simply too small to make a serious dent in the smartphone market. Heavyweights like Apple, Google, RIM, and Nokia make it very hard for a small player like Palm to sustain itself properly with custom hardware and a custom – and pretty – software stack.

There’s quite a doom and gloom feel, even among enthusiast sites like PreCentral: Palm is simply not doing well. It was expected that the Pre Plus and Pixi Plus on Verizon would really launch the young platform, but so far, this has not yet happened. WebOS’ worldwide market share is extremely small, which is of course partly due to the fact that, well, it’s pretty much impossible to get a webOS device in most parts of the world.

I’m obviously hoping that this is a temporary setback, and that it won’t affect Palm in the long run. The webOS is a truly innovative platform, and it would be very, very sad indeed if we’d have to add it to the already incredibly long list of sound and innovative technologies that didn’t make it due to peripheral reasons.

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