Could Be Worse, Could Be Raining: Palm’s AT&T Launch Delayed?
Palm’s fourth quarter may turn out to be no better than its third–an ugly period marked by a grotesque 30 percent revenue shortfall, poor sales and tepid interest in the company’s new line of smartphones.
In his latest note on the company, Canaccord Adams analyst Peter Misek says Palm’s (PALM) already substantial troubles are mounting. Palm’s latest problem: Delays in the long-rumored launch of its smartphones on AT&T (T). Originally expected this spring, sources now say the debut of new Pixi and Pre models has been pushed back until summer.
“Beyond generally lacklustre handset sales in the current quarter, which are already reflected in our previous estimates, we have recently learned that AT&T has delayed the planned launch of the Pre and Pixi on its network from April to June/July,” Misek writes.
“Moreover, we believe that this is more than just an ordinary delay,” the analyst adds, “as AT&T has cited a long list of technical issues with the Pre and Pixi. Furthermore, the carrier has decreased its initial order size and has decided to sharply reduce its marketing budget for the launch.”
So: A delayed launch on another major carrier, a smaller first order and a soft marketing budget. On top of these issues, Misek cites a mysterious “list of technical issues.” I’m not quite sure what he is hinting at; my sources tell me there are no problems with the devices on AT&T’s network–but perhaps Misek knows something they don’t.
Leaving the mystery list aside, this is bad news all around for Palm, which clearly needs the additional distribution it will get through AT&T sooner rather than later. Misek is slashing his February quarter unit shipment forecast to 670,000 from 720,000 and his 2011 forecast to 3.58 million units from four million.
Honestly, this getting difficult to watch.
Palm is scheduled to report third-quarter earnings after Thursday’s closing bell.
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