Palm plunges into the red

 

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By Simon Aughton

Posted on 19 Dec 2007 at 13:05

A delay in shipping the Treo smartphone, rising manufacturing costs and increased competition have conspired to drag Palm into the red.

The handheld device maker has reported a loss of $9.63 million for the last quarter, having made a profit of $12 million in the same period of last year.

The company blamed higher than expected warranty costs as well as shipping delays for the losses, which were not unexpected following last week's news that the company was shedding 10% of its workforce as part of a wholesale restructuring.

"It's a transformational time so things could be a bit lumpy, but we'll do our best to manage through that," says chief executive Ed Colligan. "Ultimately we have to deliver and retake the mantle of leadership for design and execution."

"We've taken actions to align our expenses to the current operating environment and are focusing on core initiatives that will have the greatest impact on achieving our long-term success."

However it was not all bad news. Sales of the $100 Centro smartphone beat all predictions, so much so that the company is concerned there may be shortages next year when it becomes available from all US network carriers.

International release plans have not been disclosed.

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