Palm, Inc. (PALM) - Bear Of The Day

Palm, Inc. (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 by June 2009, we have doubts on its success of given the current economic uncertainty that has dampened demand for consumer products. We continue to believe that Palm badly trails RIM and the iPhone 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 with our six-month price target of $5.00.

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