Palm has warned that its revenues for its 2010 fiscal year will be "well below" its previous estimates of $1.6-$1.8 billion, due to sluggish sales of its smartphones.
In a statement, the company lays the blame on lower than expected order volumes from mobile operators.
"Driving broad consumer adoption of Palm products is taking longer than we anticipated," says chairman and CEO Jon Rubinstein. "Our carrier partners remain committed, and we are working closely with them to increase awareness and drive sales of our differentiated Palm products."
Palm will give further details in its third-quarter financial conference call on 18th March, but says it expects its Q3 GAAP sales to be between $285 and $310 million.
Today's announcement will only increase speculation that Palm may become an acquisition target for rival handset makers in 2010.