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Palm Halts Pre & Pixi Production

Gordon Kelly

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Palm Halts Pre & Pixi Production

It seems that things are starting to snowball - and not in a good way...

Just four days since Palm announced its latest horrendous financial results American Banking News reports the company has now stopped productions of its Pre and Pixi smartphones. Palm has yet to comment on the news, despite the fact it sent the stock price tumbling 30 per cent to under $4 per share (it had been as high as $18 12 months ago).

Why has Palm done this? In short, because it is making phones faster than it can sell them. We know this because the biggest news in Palm's Q3 horror show was not the $22m loss, but that it had managed to sell just 408,000 of the 960,000 Pre/Pre Plus and Pixi/Pixi Plus models it shipped to telcos over the last three months. At that rate it would take Palm at least another four months to clear just its backlog and customer orders are hardly likely to increase given all the negative publicity currently going on.

On top of this the Examiner claims US telco partner Verizon has stopped promoting follow-up and flagship model the Palm Pre Plus to customers, instead pointing them in the direction of Android-based handsets like the Motorola Droid aka Milestone. On the plus side, Palm has just agreed a deal with rival US network AT&T to supply it with the Pre Plus and Pixi Plus, but again we'd have to question just how high demand will be.

Ultimately, it looks like the once great company simply took too long to reinvent itself and - once it had made that change - too long to get its new hardware onto the market (the Pre Plus and Pixi Plus still haven't launched outside the US). To which I repeat: dear Samsung and LG, you couldn't design good mobile phone software if your lives depended on it, so do the decent thing, snap up Palm and invest in web OS to make it the brilliant platform we all know it can be...

Update: Palm is disputing the report, so I'll get back to you when we have more.

Links:

via American Banking News

via the Examiner

AT&T deal via Betanews

Greg17b

March 23, 2010, 12:18 pm

They waited way too long for this. I wouldn't be surprised if Palm now disappear rather swiftly, although let's hope their technology is bought and resurfaces somewhere.





Typo btw - "your lives" not "you're lives"

sonisoe

March 23, 2010, 12:39 pm

just throw the phones around the globe, dont think pre let alone pre plus been launched in asia ? not that it will sell like hot cakes, but help reduce the inventory

Guye0a

March 23, 2010, 12:50 pm

Palm used to be such a great company in the late 90's and early 00's. Shame they turned their backs on existing customers, cutting updates, fixes and general support - a failure to provide a reasonable support period and some doggy decisions regarding EOL for some products put me off Palm for life. For one second I considered the Pre and then remembered the shoddy customer support - roll on Google and Nokia

Sapporodan

March 23, 2010, 1:12 pm

Phone: Good


OS: Fantastic


Company: Run by morons

Ed Churchward

March 23, 2010, 2:08 pm

Such a shame, it realliy is the best OS I have ever used. People are always inpressed with it, but you just can't win against apple and their mind share. It is almost impossible. I hope they can turn it around as real inovation should be rewarded.

Stelph

March 23, 2010, 3:36 pm

I wonder who is waiting in the sidelines to pick up Palm at rock bottom prices? It would be a good investment for HTC as well I would have thought, ok they seem happy to build phones for everyone else but with Google and Microsoft apparently putting restrictions on what they are and aren't allowed to put on their phones (i.e. the Nexus one and the Windows Series 7) i would have thought that getting Web OS so that they could just go nuts making concept super smart phones with no restrictions would be appealing.

rav

March 23, 2010, 4:15 pm

Totally agree with @Ed Churchward and @Stelph. I'm an Android user but actually think WebOS is better. I just didn't go for a Pre as the hardware wasn't what I wanted. I do think that even with a fantastic product it really is near impossible to succeed against the iPhone juggernaught. It would be a great buy for HTC though.

lifethroughalens

March 23, 2010, 4:32 pm

Agree with above comments, and ravmania's got a good point...HTC should go for broke to get Palm if it all goes tits up, all those lovely patents and IP.





The Palm Pre took way too long to come to market, was over priced, over rated and under spec'd. The pre-plus isn't any better either. Palm desperately needed to keep the ball rolling with bigger and better HW releases, but it doggedly stuck with the one horse whilst it got overtaken by all the competition. Sorry to say, it deserves everything it gets, but I hope WebOS will live on.

Charlie 2

March 23, 2010, 6:44 pm

From engadget


"many of the reports are citing a bunk piece of news from Monday which erroneously stated that Palm had halted production -- that news has also been refuted by the company"

Divefire

March 23, 2010, 7:00 pm

I'd love to know what the source is for this story, since Engadget and American Business News have reported the suspension of production to be false. Not that Palm aren't in a bad situation right now but knee jerk reporting doesn't help, honestly I expected better from TR.

DEB

March 24, 2010, 12:26 am

Suspending production makes sense given the surplus even a healthy company would do the same given circumstances. I think the more significant issue is the drop of 'flagship' status on O2's website. It seems Palm are really struggling to maintain full carrier support.


If they do end up being bought out I tend to agree with Gordon that LG would a better suitor or possibly even Sony. I think some major candidates have already set up camp e.g. Nokia - once rumoured be interested have jumped into bed with Intel and now gestating MeeGO.

Ironduke

March 24, 2010, 3:00 pm

I had a palm tungsten T once wonderful device.





but anyway who now can stand against the power of the iPhone?





new model and OS4 in June = Total Wictory (old school)

Malderon

March 24, 2010, 3:00 pm

The reason I didnt go for a Pre, was that I just couldnt see the uptake being that high. I didnt see it appealing to people beyond the traditional smartphone crowd. Palm is just associated with Treos and businesmen and I could never see the people that only bought a smartphone because of the iPhone frenzy getting a palm. I also thought the advertising was very weak (not in volume, they at least sprung for a few TV ads, I just thought those ads didnt do alot to sell it)





Also exclusivity with O2, which at the time was the only network with the iPhone? I mean I know UK may not have been their most important time but a very strange move.

Gordon394

March 24, 2010, 3:39 pm

@Divefire - ah yes, a "reader" with a business interest (don't worry we have many who post on here). The source of this story is nothing to do with TR and we are simply pointing out what others 'claim' to be true. This is standard journalistic practice, for example when the rumours of Michael Jackson passing away began every publication online reported what TMZ was reporting - that certainly isn't the same as them claiming it to be true directly. Surely you know this?





I was away yesterday and shall be speaking with Palm today for clarification and updating the story. Please contact us directly in future via our email addresses if you have such complaints.

Divefire

March 24, 2010, 6:59 pm

@Gordon - Actually I'm just a reader, one who enjoys TR and uses it for buying advice on a great deal of products. I trust TR's advice, so, I was rather sad to see you running a day old story that appears not to be true. I look forward to reading the updated article. Thanks for flattering me, though. :P

Gordon394

March 24, 2010, 7:20 pm

@Divefire - fair enough, but in that case you really should know the write-up of widely reported web events is a very different from saying something is fact yourself. It has nothing to do with "expecting better".

Nick Hustak

March 25, 2010, 4:36 pm

@Ironduke - I dunno, I think Google is showing them they can be beaten back, at least some. The advantage that google has (and it's a big one ) is they are not in bed with AT&T - they can, and are, going to be everywhere, even on AT&T. If I had to chose between one of the new 4G androids that Sprint is getting and an iPhone (on sprint - wont' give AT&T a dime), I'd have to think pretty hard. There are quite a few issues with the iPhone that I take exception to.





There's a segment of the world that would buy 'iPoop' straight out of Steve Jobs if he offered it. There's nothing you can do about that level of brainwashing.





I'd like to see Google snap up Palm and use their patent portfolio to stymie Apples suit with HTC.

DocMick

March 29, 2010, 9:34 pm

The stupid thing about this is that I wanted to buy a Palm Pre, having had good experience with the Treo (x2), if Palm had not taken out an exclusive deal with O2, which has a lousy coverage where I live. Dumb or what?

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