Palm posts 7th consecutive quarterly loss, announces subscription accounting for the Palm Pre

Thu, Mar 19, 2009


Palm reported higher than expected losses today at their earnings conference call. For the quarter, Palm posted a loss of 95 million dollars on 90.6 million dollars in revenue. This represents a staggering 42% drop in revenue from the same quarter a year-ago.

During an investor Q&A, Palm CEO Ed Colligan was asked a number of questions about the Palm Pre, but details about the device were few and far in between. When pressed about a release date, all Colligan would say is that it would be released during the first half of 2009. Of course, this might mean a late June release for the device, and given Palm’s current financial woes, the pressure on the Palm Pre to succeed is that much more intense.

Palm today also announced plans to account for Palm Pre sales on a subscription basis, much in the way that Apple recognizes income on the iPhone. Under subscription accounting, the income from a sale is spread over a period of months, rather than recognizing the full sale price at the time of sale. This is significant because it signifies that Palm will most likely offer free software updates to users as they incrementally improve and upgrade the WebOS over time.



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