Palm has been losing the Smart Phone market to other competitors such as Apple which released the much-coveted iPhone just earlier this year. The company is also facing tough competition from regular mobile phone makers such as Nokia, Motorola and Samsung, companies who are in tune with the pulse of their markets, releasing new models packed with features quarterly.



The company is expecting a loss $1.1 million to $ 3.2 million on GAAP for the second quarter. This translates to a loss of $0.03 to $0.01 per share on the second quarter based on GAAP. Still developments in the company as well as new product releases should help turn the company’s profitability around. In an effort to increase company profits, Palm released the Centro and the Treo 500v. Both mobile phones are designed to address the needs of the regular mobile users. The two mobile phones will compete against regular mobile phones and not against smart phones. Palm has always targeted the business crowd and this is the first time it is releasing mobile phones for other markets. The features and the price points of the Palm Centro should be appealing to consumers who want to get more from their mobile phones but do not require the applications and the price tag that come with the Smart phones. The two models will effectively open up new markets for the company which has traditionally been serving the business and high-end markets.

The Centro is a mobile phone designed with a full Querty keyboard but comes in a smaller form factor than the Treo phones. It also has a 1.3 megapixel camera, 3-G network access and a touch screen. The Treo 500v has instant messaging, email and web access. Although this phone is a Treo, it is geared towards students, mothers and other individuals who are not willing to spend on the other versions of Treo.

The Centro comes with a 2-year subscription to Sprint Nextel Corp. and is being sold for $ 99.99 making it in direct competition with mobile phones from Samsung and Research in Motion Ltd. The Palm Treo 500v was launched with Vodafone.

Aside from the expected profits from the launch of the Treo 500v and the Centro, Palm also expects better company performance as it completes its partial buyout of Elevation Partners, a private equity firm. The partnership will result in the recapitalization of $325 million from the firm with a 25% stake. The strategic partnership will be completed before the end of October.

Other relatively new developments in the company include the release of Treos loaded with Windows OS. The company also shelved the Palm Feleo, a Linux-based smart phone companion that features a full-sized keyboard and a 10-inch screen. The Feleo was supposed to be released in the middle of this year but Palm instead decided to focus on opening new markets and expanding their reach with the two additions to their mobile phones- the Treo and the Centro.