Palm CEO: WebOS bigger than just the Pre base

Palm CEO: WebOS bigger than just the Pre base

Summary: Updated: Amid weak fiscal third quarter results, Palm CEO Edward Colligan said that the company is well positioned to launch the Pre and promised a roadmap of smartphones and an application ecosystem built on the company's new WebOS.  Bottom line: Palm envisions an entire product line built on the WebOS.

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Updated: Amid weak fiscal third quarter results, Palm CEO Edward Colligan said that the company is well positioned to launch the Pre and promised a roadmap of smartphones and an application ecosystem built on the company's new WebOS.  Bottom line: Palm envisions an entire product line built on the WebOS.

Palm didn't put a date on the Pre launch, but said the device and its software were "being polished up" and being certified from Sprint as the company prepares to ramp up manufacturing.

The big takeaway: There are no showstoppers for the Pre launch in the first half of the year. CFO Doug Jeffries also added that "there's an enormous amount of interest globally for the Pre." Palm execs weren't going to detail European partners, but did note that the Pre plan calls for a step-by-step addition of international partners. "Right now we're 100 percent focused on getting the Pre launched and the Sprint product out the door," said Jeffries.

On a conference call with analysts, Colligan provided an upbeat tone to what were predictably dismal results. The company reported a net loss of $98 million, or 89 cents a share, on revenue of $90.6 million, down from $312 million a in the same quarter a year ago. Smartphone revenue fell 72 percent to $77.5 million. 

"With these financial results it's easy to forget the progress we've made," said Colligan, who argued that strategically the company is on track.

Colligan said the company is well positioned to launch the Pre on time. "We are under no illusions about the hard work that remains with bringing the Pre to market," said Colligan. But he added that "I have never had more confidence in Palm's ability to bring a new product to market on time and at scale."

However, analysts asked Palm executives what made them comfortable that the Pre would launch on time. After all, the Treo Pro was delayed. Jeffries said Palm has been working "more collaboratively" with Sprint and the company understand the process to launch more. "It's never a slam dunk, but I'm as comfortable as I ever been that we'll nail it," said jeffries.

Colligan delivered the following points:

  • The company needs seamless execution on the Pre launch. 
  • Palm is "working hard with developers to get applications ready at launch" and "aligning marketing efforts with Sprint." 
  • Palm wasn't prepared to disclose a European partner for the Pre, but the company has some "excellent options." 
  • The company plans to establish a WebOS ecosystem that goes "well beyond our base." 
  • Palm wasn't going to discuss its cash burn situation in the fourth quarter, but said its latest move to raise capital gave the company enough headroom to launch the Pre.

The messaging from Palm can be boiled down to one statement: Look ahead. Jeffries said the company's cost cutting and the launch of the Pre--along with its WebOS--will "greatly improve" performance.

Indeed, Palm will need the improvement. Palm smartphone units plunged 42 percent to 482,000 in its fiscal third quarter ahead of the launch of the Pre.

The results were largely expected since Palm had already warned that its third quarter results would be messy. The company in a statement said it is officially "proceeding through a challenging transitional period" ahead of the Pre launch. 

If successful, the launch of the Pre, Palm's much ballyhooed device, will create a new era for the company. If the Pre fumbles Palm could be in big trouble. 

The third quarter net loss included a bevy of items, but even under non-GAAP accounting Palm lose $94.7 million, or 86 cents a share. Inventories for the third quarter were $13.2 million, up from $8.89 million in the same period a year ago.

On the bright side, Palm recently raised capital that largely offset what it blew through during the third quarter. The company ended the third quarter with cash and equivalents of $219.4 million. Jeffries repeatedly noted that Palm had enough capital to give the Pre the marketing support it needs. 

Also see: The war for mobile developers is on: Do you have to pick sides?

Topics: Enterprise Software, Banking, Hardware, Mobility, Smartphones

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9 comments
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  • The Pre should be a winner

    If the Pre looks & works as good as it does in video demos, Palm should have a winner on their hands.
    linuser
  • I'll take 3, to go ...

    please.
    Oknarf
    • I do believe...

      ...that their development platform could be the start of something larger that would grow beyond the Pre....at least in UI development.
      storm14k
  • Come on palm..

    Come on palm.. Let's go already!
    pochinator
  • RE: Palm CEO: WebOS bigger than just the Pre base

    I'm bored. Think I'll play with my iPhone.
    No More Microsoft Software Ever!
  • RE: Bored

    Yep, that's about all the iPhone is good for. Boredom relief, and not much else. Us business users need something more capable than the iPhone, so that's why we're interested in this phone OS.
    Narg
  • RE: Palm CEO: WebOS bigger than just the Pre base

    If we pre pre palm users do not get a break to move up, why stay? With most of the rest of the world on other phones, I would rather go for the sure thing in the future rather than pay the full load to palm.
    dlsweb
  • RE: Palm CEO: WebOS bigger than just the Pre base

    I hope the ecosystem they refer to includes the Foleo or something akin to it. No, netbooks are not the same as the Foleo as originally revealed.
    davidaaa14
  • most stupid business decision of all times?

    i think that colligan single handily killed palm. it is called the
    osborne effect (though it actually is a urban myth). let's call it the
    plam-effect from now on: announcing a new and better product
    months before you are ready to market while trying to sell your
    "older" models is business suicide. because no one will buy your
    older models anymore, everyone is waiting for the new one.

    their loss is greater than their revenue and revenue fell by 72% yoy. i
    am amazed that this man is still in charge. otherwise good luck with
    the pre (no sarcasm here).
    bannedfromzdnetagain