Palm to Disappear By 2010?

A 24/7 Wall Street report names Palm in a list of the top twelve major brands that will disappear.

Coming in at #10 the report suggests that even with the launch of the new Palm Pre the company will not be able to survive.
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Palm (PALM) has been at death’s door for some time. It prospects have improved recently and the company has one last chance to become viable when it launches its new “Pre” product.

Recent research shows that almost no one who owns an Apple (AAPL) iPhone or RIM (RIMM) Blackberry will switch to the new smartphone, so Palm will have to essentially expand the market to get share for its new device during a recession. The “Pre” will also be sold exclusively though Sprint (S), the No.3 cellular carrier in the US which has been losing subscribers consistently for more than two years. The launch of the “Pre” is a disaster in the making. Palm’s results for the quarter that ended on February 27th were awful, failing to meet Wall St’s modest expectations. Palm sold only 482,000 handsets for the period, down 42% from the same quarter the year before. Revenue dropped from $312 million to $91 million, and Palm lost $95 million. Palm brought in just over $100 million with the help of its largest shareholder, Elevation Partners, in a recent financing.


The bottom line is that Palm has no chance of getting an even modest part of the smartphone market in a severe economic downturn since it competes with two of the premier technology companies in the world—Apple and RIM. Palm won’t be in business in a year.
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