Palm CEO Rubinstein Sends Letter To Employees

Earlier today, Palm issued a statement revising revenue forecasts for the company due to slow sales of webOS devices.  Palm’s CEO Jon Rubinstein addressed Palm employees by sending out a company wide email. The entire text of which was shared with the Wall St. Journal. It provides more insight into Palm’s earlier statement and the companies plan to reverse their fortunes.


This morning we announced preliminary results for our 2010 third quarter. Since the quarter has not yet closed, it is too soon to offer exact numbers, but we stated that we expect to report revenues for Q3 between $300 and $320 million. We also announced that we expect our revenue for this fiscal year to fall below the guidance we gave to Wall Street, which ranged from $1.6 to $1.8 billion. As we mentioned in our press release, our softer than expected performance is due to slower than expected customer adoption of our products, which in turn has prompted our U.S. carrier partners to put additional orders on hold for the time being. On a positive note, we expect to exit the quarter with over $500 million in cash on our balance sheet. We’re scheduled to announce our full financial results in March.

I realize this news is difficult to swallow. We made this announcement today to prevent a surprise for Wall Street when we announce quarterly earnings in March. In the meantime, the entire executive team has been working extremely hard to improve product performance, and have implemented a number of initiatives to increase awareness and drive sales.

Dave Whalen and I just returned from a very successful meeting with Verizon Wireless, where they acknowledged that their execution of our launch was below expectations and recommitted to working with us to improve sales. To accelerate sales, we initiated Project JumpStart nearly three weeks ago. Since then, nearly two hundred Palm Brand Ambassadors, supplemented by Palm employees from Sunnyvale, have been training Verizon sales reps across the U.S. on our products. Early results from the stores have already shown improvement on product knowledge and sales week over week. You may have also seen a growing number of Palm ads on billboards, bus shelters, buses, and subway stations—all getting the word out about Palm.

All of these efforts are examples of how we are working to accelerate adoption and grow distribution of webOS. In the next few weeks, your management will work with you to make sure your priorities are laser-focused, primarily on helping to increase sales, improve product quality and differentiate the Palm product experience.

Our goals are taking longer than expected to achieve, but I am still confident that our talented team has what it takes to get the job done.

We’ll schedule an all-hands meeting after our earnings announcement in March, and I’ll be happy to answer your questions.

Go team!!!


Considering Palm and Verizon had months to discuss the launch of the Palm Pre Plus and Palm Pixi Plus, one has to wonder why the launch was botched so badly? Both parties appear to be in agreement that the launch was below expectations. It will be interesting to see what steps are taken by Verizon to improve sales. Today’s onslaught of negative news cannot help matters.


  1. I am sure they met with Verizon for months.. You would have thought they would have learned from the failure of the Sprint launch and advertising blunder…

  2. Ask anyone if they’ve heard of the Palm Pre, Pixi, Centro, or Treo, and you’ll get, 3/4 of the time, “Is that like the Palm Pilot?” Now THAT is a marketing angle! Palm has long long long since been out of touch with it’s target demographic.

  3. A friend of mine informed me she will be switching over to Verizon in a few months and asked if I knew of any good smart phones with them…of course I immediately told her about my thoughts of all the smart phones and concluded with my love for the Palm Pre Plus. Now she too is seriously considering it as her next phone when she makes the switch. :)

  4. Eleven year Palm user changing platforms. Curious as to why? Check this post in my blog:

    Good luck!

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