Feeds

Handspring fires 40 as revenues plunge 50%

Palm price war hammers quarter-on-quarter growth

  • alert
  • submit to reddit

Choosing a cloud hosting partner with confidence

PDA maker Handspring will rid itself of 40 employees in a bid to cut costs following a "challenging" quarter, the fourth of its current financial year, details of which it posted yesterday.

Revenue for the three months to 30 June totalled $61 million, lauded by Handspring as an 18 per cent increase on the same period last year. True, but it's also less than half of the $123.8 million the company recorded last quarter.

The problem? Falling consumer demand and the effect of Palm's aggressive price cuts aimed at ridding itself of its own inventory build-up. When your main rival is offloading warehouses full of unsold kit, it makes it a lot harder to sell your own product, as Handspring has learned to its cost.

Indeed, inventory write-offs of its own drove Handspring's quarterly loss of $32.4 million up by a further $26.8 million. Amortisation of deferred stock compensation and intangibles added a further $7.9 million to the final figure of $67.2 million. That's significantly higher than Q4 2000's loss of $19.5 million, despite the year-on-year revenue growth.

To get the company back on track, CEO Donna Dubinsky announced a cost reduction programme centering on the elimination of 40 jobs, around nine per cent of Handspring's workforce, cutting back on the company's marketing efforts and putting off a plan to expand its HQ.

The goal, said Dubinsky, is to get into profit by the end of fiscal 2002. She wants the company's PDA operation to become profitable sooner than that, by the second quarter. The company will increasingly focus on wireless comms as a key driver for PDA sales.

·For all of fiscal 2001, Handspring's revenues totalled $370.9 million, up 264 per cent on the $101.9 million it recorded last year. Its annual loss came to $54.1 million, but factor in one-off items and other charges, and the figure rises to $126 million, more than double the $60.3 million Handspring lost during fiscal 2000. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Bladerunner sequel might actually be good. Harrison Ford is in it
Go ahead, you're all clear, kid... Sorry, wrong film
Euro Parliament VOTES to BREAK UP GOOGLE. Er, OK then
It CANNA do it, captain.They DON'T have the POWER!
Musicians sue UK.gov over 'zero pay' copyright fix
Everyone else in Europe compensates us - why can't you?
I'll be back (and forward): Hollywood's time travel tribulations
Quick, call the Time Cops to sort out this paradox!
Megaupload overlord Kim Dotcom: The US HAS RADICALISED ME!
Now my lawyers have bailed 'cos I'm 'OFFICIALLY' BROKE
Forget Hillary, HP's ex CARLY FIORINA 'wants to be next US Prez'
Former CEO has political ambitions again, according to Washington DC sources
prev story

Whitepapers

Free virtual appliance for wire data analytics
The ExtraHop Discovery Edition is a free virtual appliance will help you to discover the performance of your applications across the network, web, VDI, database, and storage tiers.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
The total economic impact of Druva inSync
Examining the ROI enterprises may realize by implementing inSync, as they look to improve backup and recovery of endpoint data in a cost-effective manner.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Website security in corporate America
Find out how you rank among other IT managers testing your website's vulnerabilities.