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Palm sales fell 20% in April admits CFO

And m505 PDA will ship in volume even later than expected

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Anyone in any doubt that Palm bungled its most recent product transition should listen to what the company has just said about its April sales.

Worse, Palm's latest high-end PDAs, the m500 and m505 may not ship as soon as the company has previously claimed. Both machines will revive its fortunes, the company hopes, as it struggles to compete with Handspring's PalmOS machines and Compaq's Windows CE-based iPaq.

According to Palm CFO Judy Bruner, speaking at a J P Morgan technology conference, the company's sales last month were down by 20 per cent on its March figures, based on numbers from US retail market watcher PC Data.

Of Palm's experience of the current PDA market, she said: "It's been fairly weak and getting a bit weaker from February to April."

We're not entirely surprised. In a bid to ensure it didn't appear to be losing its lead, Palm announced the sleek, silvery m500 and m505 at CeBit in March. Palm fans were impressed, but not with the fact they were going to have to wait until late April/early May to buy one.

Sales of the then top-end Palm PDA, the Vx, slumped, and Palm's plan to clear its inventory of the machine - built up late last year on the anticipation of strong sales through Q1 - by cutting prices now appears not to have helped matters.

Nor did Palm CEO Carl Yankowski's comment to Wall Street analysts last month that while the two new PDAs would ship on time, solid volume shipments would not take place for a "few weeks" later than planned.

Bruner confirmed yesterday that the two machines have begun shipping - the m500 is shipping in greater numbers than the m505 - but (according to CNET's report of her commentary) volume shipments of the colour m505 will not happen until the end of this quarter or early next.

Now, if she's referring to Palm's fiscal quarter, that means the m505 may not appear until early June. But if it's calendar quarters that she's on about, the PDA may not arrive in volume until early July. So, Judy - June or July?

We suspect the former. Or we hope so for Palm's sake, since the m505 is so central to its attempt to compete with iPaq. Compaq has problems of its own, primarily in that it can't make enough iPaqs to meet demand, though we continue to hear dire reports of reliability issues. Taiwanese computer maker High Tech Computer last month opened a new factory dedicated to punching out iPaqs. ®

Related Stories

Palm cuts prices to clear unsold stock
Palm m50x line to be late for PDA price war
Palm to axe 250 jobs as it dips into the red
PDA plant to end Compaq iPaq supply woes

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