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Palm Loses $31.5m Despite Centro Success

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Palm is in a mess, we know this already, but could its latest poor results actually turn out to have longer term positive connotations?

Despite reporting its single strongest sales quarter shipping 833,000 handsets (a 13 per cent improvement on the same period last year), the company reported a drop in revenue from $410.5m over the same period last year to $315.8m while profits of $11.8m have nosedived to a loss of $31.5m. Shares also fared badly dropping up to 16 cents for the quarter compared to the Wall Street estimate of four cents.

Remarkably however these figures are actually being treated with cautious optimism - especially since Palm attributes $21.9m of its loss down to restructuring charges and stock expenses. Furthermore, the Centro smartphone (above) - despite proving limited - is selling well with Palm reporting 70 per cent of buyers had traded up from traditional handsets suggesting potential in this entry-level sector. On top of this, Palm also believes its next line of Treo's, created under the guidance of former Apple executive Jon Rubenstein, will revitalise its product line.

Interestingly however Palm says it will not be issuing forecasts on its next few quarters instead restricting itself to statements on "general business guidance and comments on industry trends." Read that how you will...

Can Palm survive? With Nokia, Sony Ericsson, RIM, Google and a plethora of Windows Mobile devices - not to mention that pesky iPhone - all gunning for it I'll commit myself only to say this: It's next generation of products better be pretty spectacular.

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