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Palm Smartphone Sales Climb 49% but Losses Widen

Sunnyvale, Calif. — While its smart phone sales jumped 49 percent, Palm reported wider losses for its first quarter of fiscal 2009, compared to the same period last year.

Palm’s smartphone sales climbed to a record 1.03 million units during the quarter ending August 31, led by sales of the entry-level Centro, but net losses widened to $41.6 million, from $841,000 a year earlier, said the company.

Revenues edged up 1.7 percent to $366.9 million, from $360.8 million a year ago.

During a conference call, Palm president and CEO Ed Colligan told analysts that the market is shifting from desktop to mobile computing. He said, “We believe that a seamless spectacular integration of software and hardware will emerge the most important differentiator of smartphones and will ultimately determine who succeeds and who gets left behind. We think Palm excels in this field and we’ll be pressing this advantage in a big way” with a next generation of phones. The platform for this next generation “is firmly on track” to be completed by the end of the year with product on shelves by the first half of calendar 2009.

Palm was recently knocked out of the No. 2 slot in smartphone sales by Apple, according to analysts.

Colligan also pointed to challenges over the next six months for the company. “We’ve got challenges to manage over the next two quarters given the maturing Centro lifecycle and the time it will take to ramp our Windows Mobile based product sales worldwide.” Such products include the newly released Palm Treo.