Highlights include Palm, Inc. (PALM) and Research In Motion Ltd. (RIMM).

Palm, Inc.’s (PALM) 3Q09 revenue declined by 71.0% y-o-y due to pricing concessions and lower volume for its maturing legacy smartphone, weak consumer spending and delay in shipments of the Treo Pro in the U.S.

Though Palm expects to launch its Palm Pre ‘next gen’ phone in the first half of calendar year 2009, we doubt the success of it given the current economic uncertainty that has dampened demand for consumer products.

We do not expect any significant sales of either the new Pre device or the new operating system before June 2009. Part of the company’s current problems may be that existing customers are waiting for the new products.

If this is the case, revenue should rebound in 2010 fiscal year from the current level. However, we do not expect a return to profitability in the foreseeable future.

We are again lowering our estimates for 2009 and 2010. We continue to believe that Palm badly trails Research In Motion (RIMM) in the smartphone market, and will not be able to effectively compete as an independent company. We have a low confidence in its ability to survive with a weak market share, so we reiterate our Sell rating on Palm shares.

Read the full analyst report on “PALM”
Read the full analyst report on “RIMM”
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