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Report: Verizon says no to Palm Pre

If a report on TheStreet.com is to believed, things just took a turn for the worst for Palm.

If a report on TheStreet.com is to believed, things just took a turn for the worst for Palm.

TheStreet, citing "people close to the discussions," is reporting that Verizon has had a change of heart about carrying the Palm Pre, a smartphone that was scheduled to arrive in January. Currently, the Pre is sold exclusively through Sprint - but the carrier's struggle to compete with powerhouses AT&T and Verizon hasn't helped Palm sell enough Pre smartphones to make an impression.

The sources also told TheStreet.com that Verizon may order a small number of Pres but offer little marketing of them. Instead, Verizon is focused on new Blackberry products as well as those built on the new Google Android operating system.

For Palm, the news could be devastating. The company said in its last earnings call that it was focusing all of its efforts on the new WebOS, which so far consists of the Pre and smaller Pixi. Part of its growth strategy included bringing its devices to other carriers.

Shares of Palm plummeted in the final minutes of regular trading, shortly after TheStreet's report was published. Shares closed at $16.16, down nearly 5 percent.

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