Palm Expects $60M Less in Sales

Joining the dark trend of lowering quarterly fiscal expectations, leading handheld maker Palm, Inc. Thursday said fourth-quarter
revenue will be $60 million to $70 million less than previously expected.

The Santa Clara, Calif. firm expects to report sales of $230 million, compared with the previously expected $290 million to $300
million. Moreover, the hardware concern will not meet its breakeven profitability expectations for the current quarter, which ends

The firm is clinging to recent optimistic findings for balance: Palm still believes it will reap operational performance in line
with prior guidance, noting that the share for handhelds and operating system software in U.S. retail grew over the last three

Palm Chairman and Chief Executive Officer Eric Benhamou discussed the news in a public release.

“Demand in spring did not materialize as we had previously expected, but rather market conditions deteriorated compared to both the
year-ago quarter and recent months,” Benhamou said. “While we remain optimistic about the long-term growth opportunities in the
sector, we are disappointed that we will not meet our revenue and profitability goals this quarter.”

Benhamou then expressed optimism, noting that his company is executing well despite the sluggish market.

“Over the last three months, we have continued to consolidate our leadership position within the handheld industry. We remain
confident that our investments in new markets, new geographies, and a new generation of handhelds will result in renewed and
profitable growth in the years ahead.”

Lastly, Benhamou said the company is on track to split Palm into two divisions: one for hardware, one for software. It is also on
pace to migrate the Palm OS to the ARM processor.

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