In a preliminary report on September 6, the Sunnyvale, California-based PDA and smart phone vendor said revenue for its fiscal first quarter (ended September 1) is now expected to come in at $354m-$356m, where it had previously issued guidance for the quarter of $385m.
Palm attributed the shortfall to lower Treo volumes in carrier retail channels, with CEO Ed Colligan promising to address the market dynamic responsible for our first quarter revenue shortfall with two major product launches.
Colligan said one of these products improves our pricing position. It will be a cheaper model, that will extend our carrier relationships to global markets, he said, indicating they will be for the GSM market, which is around 10 times the size of the CDMA world.
CDMA is strong in North America (with Verizon Wireless, Sprint and Bell Mobility), Japan (KDDI) and Korea, where all the major operators use this radio access technology, as well as having a presence in China, where China Unicom has a CDMA business in addition to its GSM network.
Its US strength, of course, explains Palm’s initial priority for that technology, but of course it has to expand in GSM, which has over two billion subscribers compared to CDMA’s 335 million at the end of the second quarter.
The Treo is the first and, until now, only phone in the Palm portfolio, launched initially on the Palm OS and, since earlier this year, with a Windows-based alternative, the Treo 7000w. That device is only available for CDMA networks, however, a situation Palm will rectify on September 12 when it will unveil a GSM version.
