Palm Admits to Sluggish Pre, Pixi Sales

By Nick Mokey February 25, 2010

Blame Steve Jobs, the iPhone, or just fickle consumers. Despite a killer reception at its announcement of WebOS, and generally positive reviews of the Pre and Pixi, Palm’s handsets just aren’t moving.

Palm admitted to the problem in an update to investors on Thursday, warning of “slower than expected consumer adoption of the company’s products that has resulted in lower than expected order volumes from carriers and the deferral of orders to future periods.”

Based on the slow sales, Palm expects third-quarter revenue of $300 to $320 million, well short of the average analyst estimate of $424.7 million, according to Thomson Reuters I/B/E/S.

Jon Rubinstein, Palm CEO and the architect of Palm’s 2009 rebirth with WebOS, offered conciliatory words. “Driving broad consumer adoption of Palm products is taking longer than we anticipated,” he said in a statement. “Our carrier partners remain committed, and we are working closely with them to increase awareness and drive sales of our differentiated Palm products.”

Palm’s announcement of WebOS early last year was widely seen as the last shot for the ailing company, which had fallen behind leaders like Apple, RIM and even Microsoft in the smartphone market. If Palm can’t make WebOS sell, the company may not get another chance to reinvent itself.

Palm shares fell 20 percent in morning trading, following the announcement.

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