Whether it was triggered by anticipation of Palm’s new OS or the upcoming demise of the old one, Palm’s handest sales took a nose-dive in the last quarter. The company sold 482,000 smartphones in the three months ending Feb. 27, almost half of the number sold last year, while device revenues dropped 72%. Though not exactly the kind of numbers any company wants to see, they were largely expected as Palm prepares to sunset the Palm OS, replacing it with its new Linux-based operating system sometime this year.
“We’re proceeding through a challenging transitional period, however our current results shouldn’t overshadow the tremendous progress we’ve made against our strategic goals,” Palm CEO Ed Colligan said in a statement. ”We’re poised to usher in a new era at Palm.”
With the new Pre, Palm is tapping into recent trends in wireless that emphasize Linux-based operating systems with a high-degree of Web-based functionality. It’s old Palm OS was originally designed as PDA operating system, which carried over to the smartphone when the Treo was born. Palm isn’t taking a complete departure from its roots. It’s still leveraging its expertise in personal information management and synchronization–it’s just adding a Web-based spin. For instance, instead of merely synching with enterprise apps on the PC and office network, the Pre will aggregate e-mail and calendar entries from Web-based and enterprise-based sources.
Palm, however, is in a race against time. Gartner estimated 15.6 million smartphones were shipped in the 4th quarter, making Palm’s market share miniscule. Palm continues to sell Microsoft Windows Mobile-based smartphones, but it will have trouble selling Palm smartphones based on an OS consumers know is obsolete. It needs to get the Pre out soon.