Palm Repeats Plans After Report Verizon May Snub Pre
Palm Inc., maker of the Pre smart phone, reiterated its plan to work with additional wireless carriers in the second half of fiscal 2010.
The announcement came after TheStreet.com reported that Verizon Wireless scrapped plans to sell the Pre, sending Palm shares down 4.7 percent yesterday. Derick Mains, a spokesman for Sunnyvale, California-based Palm, declined to say whether the statement was in response to the report, saying the company doesn’t comment on rumor or speculation.
Palm, which currently offers the Pre exclusively through Sprint Nextel Corp., said last week that it would distribute its devices through other carriers in the second half, without saying which ones. Verizon, the biggest U.S. wireless carrier, had said in May that it planned to offer the Pre after Sprint’s exclusive contract ends.
TheStreet.com, citing unidentified people close to the talks, said yesterday that Verizon abandoned a plan to offer the Pre in January because the phone hasn’t become a blockbuster seller. Jim Gerace, a spokesman for Verizon, declined to comment.
The Pre, released in June, isn’t fueling the kind of sales that some analysts and investors had anticipated. This month, Palm forecast revenue of $240 million to $270 million in the current quarter, including sales recognized over the life of phone contracts. That missed the $305.9 million average estimate of analysts in a Bloomberg survey.
Comeback Plan
Palm Chief Executive Officer Jon Rubinstein, 53, is counting on the Pre to reverse nine straight quarterly losses. The company is ramping up marketing this quarter as it takes on Apple Inc.’s iPhone and Research In Motion Ltd.’s BlackBerry. The Pre, like the iPhone, lets people surf the Web and call up information from their phones by swiping the surface of a touch screen.
Palm rose 21 cents to $16.37 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have climbed more than fivefold this year on speculation that the Pre will lead to a rebound at Palm.
Verizon Wireless, based in Basking Ridge, New Jersey, is jointly owned by Verizon Communications Inc. and Vodafone Group Plc. AT&T Inc. ranks second in the U.S. wireless market, followed by Sprint.
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The announcement came after TheStreet.com reported that Verizon Wireless scrapped plans to sell the Pre, sending Palm shares down 4.7 percent yesterday. Derick Mains, a spokesman for Sunnyvale, California-based Palm, declined to say whether the statement was in response to the report, saying the company doesn’t comment on rumor or speculation.
Palm, which currently offers the Pre exclusively through Sprint Nextel Corp., said last week that it would distribute its devices through other carriers in the second half, without saying which ones. Verizon, the biggest U.S. wireless carrier, had said in May that it planned to offer the Pre after Sprint’s exclusive contract ends.
TheStreet.com, citing unidentified people close to the talks, said yesterday that Verizon abandoned a plan to offer the Pre in January because the phone hasn’t become a blockbuster seller. Jim Gerace, a spokesman for Verizon, declined to comment.
The Pre, released in June, isn’t fueling the kind of sales that some analysts and investors had anticipated. This month, Palm forecast revenue of $240 million to $270 million in the current quarter, including sales recognized over the life of phone contracts. That missed the $305.9 million average estimate of analysts in a Bloomberg survey.
Comeback Plan
Palm Chief Executive Officer Jon Rubinstein, 53, is counting on the Pre to reverse nine straight quarterly losses. The company is ramping up marketing this quarter as it takes on Apple Inc.’s iPhone and Research In Motion Ltd.’s BlackBerry. The Pre, like the iPhone, lets people surf the Web and call up information from their phones by swiping the surface of a touch screen.
Palm rose 21 cents to $16.37 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have climbed more than fivefold this year on speculation that the Pre will lead to a rebound at Palm.
Verizon Wireless, based in Basking Ridge, New Jersey, is jointly owned by Verizon Communications Inc. and Vodafone Group Plc. AT&T Inc. ranks second in the U.S. wireless market, followed by Sprint.
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