Palm posted disappointing financial results Monday, swinging to a loss for the first time since 2003.
During the company's first fiscal quarter of 2008, which ended August 31, Palm recorded a net loss of $800,000, compared with net income of $16.5 million last year. Smart phone revenue was up 21 percent, but overall revenue was up just 1 percent from $356 million last year to $361 million this year.
Much has been made about the effect of the iPhone on Palm, but were that it's only problem. Everyone's passing Palm by these days as the company has been slower than rivals like Research in Motion, Nokia, and others to introduce updated designs. It recently launched the Palm Centro to try to recapture some momentum, but the impact of that launch won't be felt until next quarter.
Perhaps that's why Palm spent so much into research and development during the past quarter, spending $53 million compared with $41 million last year. But things aren't going to get much better during the next quarter, as Palm forecast that both revenue and profit would fall well below Wall Street's expectations.