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CNBC.com |
Or is there? This past year was abysmal for the smart phone maker: late-to-market products, a stock price in freefall, worries that its single biggest investor Elevation Partners may divest its stake in the company, a pricing model for the Palm [PALM
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]Treo Pro that raised lots of eyebrows, layoffs, a new chief financial officer with little direct Wall Street experience announced Monday, and true worries about whether Palm even stands a chance as a going concern in 2009.
(A word on that CFO change: Andy Brown had been with Palm since 2004. He's being replaced by Douglas Jeffries, the former chief accounting officer at eBay. As you read below, you have to wonder why the company is making this change now, mere weeks ahead of what should be the company's triumphant release of its new operating system. It may be sheer coincidence, but the timing here seems very odd to me.)
Palm already pre-announced its earnings with revenue in the range of $190 million to $195 million which was about half what many analysts were anticipating. Earnings for this company are almost an after-thought with just about everyone focused on what's in Palm's product pipeline.
Most notably is the buzz surrounding the scheduled Palm event coming up at the Consumer Electronics Show, when just about every blogger suspects the company will finally unveil its long-anticipated, and long-delayed, next generation operating system called "Nova." There's also mild speculation that Palm may also unveil a new handset of some kind.
So what is Nova and why is there so much interest? For one, Palm's at risk of becoming an also-ran in the smart phone sector, consistently losing share to Apple [AAPL
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] and the iPhone and Research in Motion's [RIMM
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] BlackBerry juggernaut. (RIM reports earnings on Thursday as well and an earnings preview for that company will post shortly.) Nova may be Palm's best, and last chance to grab market share against its far bigger rivals, but only if it can actually get this software, languishing on engineer screens for years, out the door. And that's a big "if."
The buzz surrounding the Palm operating system, which comes from a recent BusinessWeek interview with the company's executive chairman Jon Rubinstein, focuses on what it can do to bridge the gap between business users and regular consumers looking for the ultimate all-in-one device. That, of course, has been the focus of Apple and RIM, which are way, way ahead of Palm in the market place with devices that have been answering those issues. Not to mention Google [GOOG
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] and its nascent Android mobile operating system. HTC. Nokia [NOK
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] and its new E71.
I'm just not sure what Palm can do to emerge from its troubled past and present. The company has been plagued by execution problems and even if it does unveil Nova at CES (you can bet it will), handsets running the software may still be months away. Not days or weeks. But months. Which means any revenue and profits are still several quarters off.
Another issue for Palm: The Treo Pro. I posted way back when this phone was unveiled that the $549 price tag for the unlocked phone -- at a time when every other handset maker was slashing prices -- was a quizzical strategy. Speculation was that Palm couldn't score a US carrier for the phone and that's why it was released "unlocked" with that high price tag because there was no carrier subsidy available. Since then, just about everyone has wondered whether the company would announce a carrier deal with AT&T [T
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] . So far, no news. That's a problem.
Worse, Global Crown Capital's Pablo Perez-Fernandez (he's got a "Sell" rating on the shares and a $1 target) is hearing rumblings that Verizon might stop selling Palm's best-performing product, the attractively priced Centro, even as Apple is taking the iPhone mainstream by getting into Wal-Mart [WMT
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] in a couple of weeks.
Palm's got big problems. Still. Unless CEO Ed Colligan can figure out way to come up with something big in Vegas next month, Palm shareholders run the risk of coming up craps. Still.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes