Palm’s Outlook Hazy as Pre, Pixi Disappoint

Mobile device pioneer Palm has Wall Street analysts concerned about its future as another quarter comes and goes without its flagship Palm Pre proving a bona-fide hit.

Average selling price in the third quarter was $367, compared with $375 in the previous period. Sales on a per-unit basis were way down: Palm shipped 960,000 Pre and Pixi phones to carriers, but the carriers only sold 408,000 devices, down 29 percent from the second fiscal quarter. Cash on hand totaled $376 million exiting the quarter, while operating expenses clocked in at around $164 million.

Even worse, Palm sees fourth-quarter revenue coming in at less than $150 million, half of the $358 million expected by analysts surveyed by Thomson Reuters. As it is, last month Palm lowered this quarter’s estimates by $100 million on weak Pre and Pixi sales.

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Palm’s Poor Quarter Raises Concerns About Its Survival