Palm reported record revenue for the first quarter, but executives admit that demand still outstrips supply and will continue to do so for the next couple of quarters.
The bottleneck is a supplier that's unable to deliver, in the numbers needed, two integrated chips for Palm's handhelds. Monday, during the earnings teleconference, executives said they're looking for additional suppliers.
"We haven't marketed as aggressively as I'd like," Palm CEO Carl Yankowski.
Despite the constraints, Palms quarterly revenue, for the period ending September 1, were $US401 million, up 127% compared to $US176.5 million a year ago. It was a 14% increase over the fourth quarter of Fiscal 2000.
Pro form net income, which excludes things like amortized goodwill and the costs of separating from parent 3Com Corp., was $US23.9 million or 4 cents per share, up 140% compared to $US10 million, or 3 cents per share, a year ago. It was up 39% compared to $US17.2, or 3 cents per share, in fourth quarter of fiscal 2000. Palm became a public company in March.
The company shipped in the first quarter about 1.5 million handheld devices, which along with accessories and services, accounts for the bulk of the revenue: about $US389 million. Palm has shipped nearly 9 million handhelds.
License revenue for its PalmOS software, which is used in products from Handspring Inc., IBM Corp. and serveral consumer electronics companies, low by comparison, only about $US4.6 million but executives said that amount has begun growing very fast as the licensees pump more and more PalmOS devices into the market.
Palm expects to continue to broaden the market for PalmOS. Kyocera Corp.'s Wireless division last week announced that it would use the Palm software in a new line of handsets. RealVision Technology Ltd. is bringing out a GSM phone that will snap into Palm V handhelds, and gives users easy dialing features and instant messaging. And this week, Palm and Motorola Inc. said they'll work to create a brand new GSM smartphone, based on the PalmOS, that will blend voice and data in a new design.
The company is using network calendaring software from its AnyDay.com acquisition to transform its Palm.Net service into a full-blown, interactive mobile portal for PalmOS devices. Currently, Palm.Net is a content service for users of the Palm VIIx handheld, which has a built-in antenna and a ready-to-use wireless net account. The new service, due out later this year, will feature more advanced calendar synchronization, search and browse features, and users will be able to download applications.
The first step toward a wired Palm world is the pending release of Palm's Mobile Internet Kit, which will let existing Palm users access Palm.Net and the forthcoming mobile portal.
Yankowski told reporters and analysts that the company is doubling the number of engineers working on Palm's wireless hardware and software initiatives.