Aug. 20 (Bloomberg) -- Palm Inc. has introduced a second Treo e-mail phone in less than two months to challenge Research In Motion Ltd.'s BlackBerry and Apple Inc.'s iPhone, and end four straight quarters of losses.
The Treo Pro will sell for $549 in the U.S. later this year without a carrier partner, allowing users to run it on a variety of networks, Palm said in a statement. Wireless providers in Europe will offer it next month for free or at prices up to 399 euros ($589), depending on the service contract users select.
To snap a three-quarter sales slump, Palm is trying to lure customers from the $199 iPhone 3G with updated e-mail features and a new BlackBerry that lets users edit documents and watch video. While the Treo Pro's features are competitive, the device won't be successful unless Palm gets carriers to subsidize it and offer it for $250 or less, Global Crown Capital analyst Pablo Perez-Fernandez said.
``The only way they're going to turn the ship around is bringing to market compelling products that are competitively priced,'' said San Francisco-based Perez-Fernandez, who recommends buying the shares and said he doesn't own any.
In July, Palm said it sold 2 million units of its $99 Centro phones in less than a year. While the Centro is helping Palm increase revenue, the company has to sell more of the pricier Treos to expand its profit margins, Perez-Fernandez said. In June, Palm posted a wider fourth-quarter loss than analysts had estimated and projected a loss this quarter even though sales will increase for the first time in a year.
`Not Good Enough Yet'
``The numbers tell me we're not doing good enough yet and we've got to keep working hard to make them better,'' Chief Executive Officer Ed Colligan, 47, said in an interview at Palm's headquarters in Sunnyvale, California. ``The profitability strategy is `get these products out in the marketplace and sell them in millions.'''
Palm fell 4 cents to $7.76 at 4 p.m. New York time in Nasdaq Stock Market trading and has gained 22 percent this year.
The Treo Pro is based on Microsoft Corp.'s Windows operating system, which is gaining popularity in mobile phones, according to Perez-Fernandez. The device has satellite navigation and lets users surf the Web through wireless Internet or mobile-phone networks, matching features on the BlackBerry and iPhone.
The phone, which has a touch screen and full keyboard, is half an inch (1.4 centimeters) thick, about the same as the iPhone and a quarter of an inch thinner than older Treo models. It will be available in Europe through Vodafone Group Plc and Telefonica SA's O2 unit and through Telstra Corp. in Australia in September. More carrier contracts will be signed worldwide, Palm said.
Bold Competition
The device will compete against the BlackBerry Bold, the most advanced BlackBerry so far, scheduled to start selling for a yet-undisclosed price in the U.S. in the next few weeks. Apple is also selling its iPhone to business users and added support for Microsoft's corporate e-mail system in the latest version. Both the iPhone and the Bold are offered by AT&T Inc., the largest U.S. phone company.
The Centro helped Palm increase U.S. sales of so-called smartphones, handsets that serve up e-mail, to 13.4 percent in the first calendar quarter from 7.9 percent in the previous three months, according to Framingham, Massachusetts-based research firm IDC. The BlackBerry boosted its share to 44.5 percent from 35.1 percent. Apple's share fell to 19.2 percent from 26.7 percent.
Source:
Bloomberg
