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Palm Has Visions of Sugarplums

Palm Inc. (Nasdaq: PALM) is predicting revenue for the second quarter of fiscal 2003 of between $245 million and $265 million, 10 to 15 percent lower than the same quarter last year, but better than the first-quarter results that the firm just announced (see Palm Reports Q1).

Demand for handheld computers in both the enterprise and consumer markets will generally remain down, says Palm CFO Judy Bruner. However, the firm is expecting to see a fillip in sales from the holiday season.

Palm has just announced new products: an ARM-based OS5 device, a smartphone, and a low-end device (see Palm Trots Out Subbrands). However, Palm is only expecting to see significant revenues from the low-end device, because the others will not be out much before the end of the quarter.

Separately, interim Palm CEO Eric Benamhou also confirmed reports that Palm may be looking for a cash injection for its software division. "We may be looking for minority investors in the PalmSource business," he said on the Palm first-quarter conference call. However, he declined to comment on a Wall Street Journal article that suggests Sony Corp. could be among the investors.

— Dan Jones, Senior Editor, Unstrung
http://www.unstrung.com
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