Verizon, Rubinstein says, have agreed that “their execution of [Palm's] launch was below expectations and recommitted to working with us to improve sales.”  This will involve greater advertising and more Palm “experts” attempting to teach would-be buyers why webOS should feature in their future.  Full email is below:

Team,

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!!!

jon

That program will kick off midway through the month, and the selected titles – which will include both free and paid apps – will be among the next wave of software released into the Catalog.  Revenues will be split 70/30 (developer/Palm) after relevant sales taxes, with only one-time charges allowed, while customers will be able to use Visa and MasterCard credit cards to pay for their apps.  Conspicuous by its absence is any sort of cut for the carriers.

The full developer program is expected to launch in the US this fall.  More details regarding paid-apps policies at http://pdnblog.palm.com/

Press Release:

Palm to Open E-commerce Beta Program for Palm App Catalog

SUNNYVALE, Calif., Aug. 18, 2009 — Palm, Inc. (NASDAQ: PALM) announced that starting today developers who wish to charge for their Palm webOS™ applications can begin submitting them for consideration in the Palm® App Catalog e-commerce beta program, which will begin in mid-September. Developers selected to participate in the beta program will have the opportunity to have their applications, both free and paid, featured in the Palm App Catalog ahead of the next wave, and to be among the first to be paid for purchases of their Palm webOS applications.

As part of the App Catalog e-commerce beta program for the Palm Pre™ phone and future Palm webOS devices, developers will receive a 70/30 split (developer/Palm) of gross revenues generated through application sales (less applicable sales taxes). Customers will be able to easily purchase applications using Visa and MasterCard credit cards. Further details about the program and distribution model will be provided in the coming weeks. Palm expects to launch the full developer program in the United States this fall.

“We’re rolling out the submission process and e-commerce capabilities of the Palm App Catalog with careful consideration for both the developer and customer,” said Katie Mitic, senior vice president, Product Marketing, Palm, Inc. “We want every part of the Palm webOS experience to be the best, and a strong e-commerce model is key to a thriving developer community, great apps and an excellent customer experience.”

More information about how developers can submit an application for the beta
e-commerce program, as well as criteria for application acceptance, is available on the Palm Developer Network blog at http://pdnblog.palm.com/.

About Palm, Inc.

Palm, Inc. is a leading mobile products company, creating instinctive yet powerful mobile products that enable people to better manage their lives on the go. The company’s products for consumers, mobile professionals and businesses include Palm Pre™, Palm® Treo™ and Palm Centro™ phones, as well as software, services and accessories.

Palm products are sold through select Internet, retail, reseller and wireless operator channels throughout the world, and at Palm online stores (http://www.palm.com/store).

More information about Palm, Inc. is available at http://www.palm.com.

That’s significantly lower than the early estimates, and reassuring news for Palm shareholders.  Abramsky and his team monitored around 24 Sprint stores to gather their data, concluding in a report this week that Palm Pre sales have “sustained momentum”.

They also suggest that Sprint has sold around 350,000 Pre devices in the seven weeks since it launched.  All well and good, until you remember that back on June 30th Equity Research analyst Edward Snyder tipped Pre sales figures to that point at 300,000.  Either Sprint has only sold 50,000 Pre smartphones in July, or someone’s guesses were way off base.  Palm’s stock value had risen 400-percent for the year by the end of June, but dipped 15-percent this month on the basis of the poor returns rate estimates.

That issue, of course, was that Apple purposefully blocked the Pre in their most recent iTunes update, repeating their earlier warning that “in future” some devices not officially supported by themselves may not work with the software.  Palm obviously took that as an invitation to tweak their smartphone to restore compatibility.

Elsewhere in webOS 1.1.0 there’s faster performance overall, a switch to Wikipedia mobile versus the full site when searching in Card view or from the Launcher, a new gesture to move forward through webpages (”make a short swipe left to right in the gesture area”) and emoticons are properly displayed.  There’s also better management over unread email counts for push-email.  Palm have the full list of changes here.

Palm have also confirmed that they have an unknown number of new applications in the pipeline for release into the App Catalog, presumably from the closed “early access program” that has been running from early April.  It’s unclear when these will actually be released for Pre owners to download, but given Apple have just announced that they have passed the 1.5bn app downloads mark, it makes sense that Palm will try to get more content out as soon as they can.

As well as the Mojo SDK itself, Palm have also made available all of the developers guide and documentation, plus their UI guidelines and a “hello world” sample app.  More information at their new developers’ portal.

According to PreCentral’s anonymous tipster, webOS 1.1 will bring with it improved Exchange Active Sync policies and Security, the potential for remote-wipes by IT admins, improved digital certificates and an auto-lock function.  It will also introduce a required PIN for enterprise users and even have the capability of wiping the Pre should an incorrect PIN be entered a set number of times.

Meanwhile other sources have suggested more applications will also arrive in a similar timescale, though it’s unclear whether they will be of Palm’s own making – and distributed as part of webOS 1.1 – or available through the App Catalog.  Palm are apparently aiming to get the update out within the next thirty days.

To be really clear, events like these are not usually known for elucidating any unusual information or “scoops”. Lucky catches – such as our spotting a GSM SIM card in the demo Pre units back at Mobile World Congress – are the exception not the rule; instead, a meet-and-greet like today’s is more about companies showing that they’re all toeing the party line.  By request from Palm’s PR company, we were not allowed to shoot any photos or video.

In terms of hardware, Palm were quick to make clear that the only change for the GSM Pre is in its radio. There’s no new microSD card slot, no software tweaks (beyond the webOS updates pushed out between now and the smartphone’s release) and no extra internal memory. There’ll also be no O2 logo on the mirrored rear panel, unlike Sprint’s version of the device. When we questioned whether 8GB would be enough for the handset’s “by the [Christmas] holidays” launch, Palm’s reps seemed confident that it would be “enough for most people.”

As for that launch schedule, Whalen admitted that it was largely a result of production bottlenecks. The Pre is, he reminded us, a pulling together of many hitherto unseen construction methods and features, such as its flush-fitting, bezel-free touchscreen, and as such is subject to the “usual” new-device manufacturing hiccups. For O2’s part, Earle suggested that the likely-December launch was more a conscious choice, giving the carrier time to adequately train staff as well as prepare the network itself for the Pre’s backup, Synergy and other wireless foibles. The cynic among us might also suggest that it gives them plenty of time to enjoy sales of the new iPhone 3GS, too.

Unsurprisingly, we couldn’t draw O2 on pricing, either. Earle would only say that it will be priced “competitively, not only against rivals but our own range”, and when asked about a potential clash with the iPhone suggested that rather than compete with each other, the two smartphones will appeal to different customer segments. O2 are attempting to position themselves as “the smartphone carrier”, and in a moment of admirable (if obvious) honesty Earle admitted that “at the end of the day our responsibility is to our shareholders.”

Palm, for their part, seemed cavalier about going up against the iPhone, alluding also to RIM as a strong competitor but suggesting that the Pre is distinctive by virtue of bridging the divide between business and personal use. He did at least quip that he imagined rivals might say the same about their products.

When we asked about applications and webOS SDK availability, Palm reiterated their timescale to bring it out of beta and into more general availability toward the end of the summer. While it was unconfirmed, it seems that – as with Sprint and the CDMA Pre launch – the GSM version of the smartphone will launch with a number of “flagship” applications. Whalen said that Palm were looking to O2 for guidance on key partner software and service providers to get involved with the Pre SDK.

If anything, our meeting today was a nice opportunity to grab a brief hands-on with the GSM version. As the UK member of the My Pre team, it feels like it’s been a long time since Barcelona in February and the brief fondle I had of the smartphone. I was reminded of how compact is feels, compared to devices like the iPhone 3GS or most Windows Mobile phones, and all of a sudden my complaints about the missing microSD card slot seemed faintly unfair. The screen is also a real joy, bright and stunningly crisp, and with very broad viewing angles. There’s still a lot to love about the physical design of the Pre.

What isn’t especially lovable is the timescale for the launch. The GSM Palm Pre will arrive in Europe almost a year after the handset was first announced, at CES in January, and not only after the iPhone 3GS has been on sale for around six months but in the shadow of whatever camera-encrusted iPods Apple unveil in September. Assuming even the most incremental of tech updates, rival devices will have up to 64GB of flash capacity or access to masses of low-cost microSD memory. Given that reviews – ours included – of the CDMA Pre criticized it for its relatively meager storage, Palm’s decision is only going to look more miserly as the months go on. O2’s sales staff will have a hard time convincing the new-to-smartphone customers both they and Palm envisage that, when seen on paper, the Pre’s storage specifications are in line with capacious rivals.

There’s a sense among the European bloggers and smartphone community that Palm may have underestimated the market here, one that is arguably more cut-throat and fast-moving than its counterpart in the US. For a device on which so much rests, that could be a dangerous oversight. Today, in a meeting room with an enthusiastic entourage and in the eyes of a Pre-loving blogger, Palm’s new GSM smartphone reasonably held its own. Whether it’ll be able to do the same when it hits stores six months down the line remains to be seen.

As predicted, there’s no significant change to the Pre from its US form, aside from switching out the CDMA EVDO Rev.A radio for an HSDPA/UMTS version.  Palm have not clarified which bands the GSM Pre will support. 

Neither have any of the carriers announced pricing for the GSM Pre, which will presumably come closer to the smartphone’s release.  You can sign up for more information in the UK and Ireland here, Germany here, or Spain here.

Press Release:

Palm Pre to Launch in Europe with O2 and Movistar

Palm webOS Phone to Arrive in UK, Ireland, Germany and Spain on Local Telefónica Networks

WINDSOR, England, Jul 07, 2009 (BUSINESS WIRE) — Palm, Inc. (Nasdaq:PALM) today announced that the Palm(R) Pre(TM) phone is scheduled to be available initially in the UK, Ireland and Germany exclusively on the O2 network, and in Spain exclusively on the Movistar network, in time for the holidays. Palm Pre, the first phone based on the new Palm webOS(TM) mobile platform, brings your information from the many places it resides – on your phone, at work or on the web – into one simple, integrated view.(1)

“Europe continues to be an important region for Palm, and we’re proud to work with O2 and Movistar to spread the excitement Palm Pre has already ignited in North America,” said Jon Rubinstein, Palm chairman and chief executive officer. “Since we showed Palm Pre at Mobile World Congress in February, there’s been a great deal of anticipation for an announcement about European availability, and that day is here.”

“We are fast becoming the home of the smartphone with the addition of the hotly-anticipated Palm Pre to our already extensive portfolio,” said Matthew Key, chairman and chief executive officer, Telefónica Europe. “Our customers will be the first outside of North America to experience one of the most successful mobile devices of the year.”

In its first weekend of availability in the United States, Palm Pre broke Sprint’s previous first-weekend sales records. Palm Pre also is scheduled to debut in Canada with Bell Mobility in the second half of 2009.

Palm Pre introduces a breakthrough user interface and hardware design that makes it one of the most integrated and user-friendly mobile phones on the market. Featuring a smooth, elegantly rounded ergonomic design and a physical keyboard that slides out only when needed, Palm Pre is engineered to feel natural in your hand and comfortably small in your pocket. When closed, Palm Pre is ideal for phone calls, web browsing, music, photos and videos; when open, Palm Pre is optimized for email and text messaging. It provides an exceptional experience for phone calls, whether held to your ear, over speakerphone or via Bluetooth.

With its curved slider and gesture-controlled touch interface, Palm Pre fuses exquisite design with the revolutionary webOS software for fast access to content on the device or web. Invented exclusively for mobile use, webOS offers an instinctive user experience that seems to anticipate your needs.

Key Features and Benefits of Palm webOS

Palm Synergy(TM), a key feature of the new webOS, brings your information from all the places it resides into one logical view. You don’t have to worry about tracking multiple calendars, contacts and messaging applications – Synergy seems to think ahead to bring you a more comprehensive and truly representative view of your life.

Linked contacts – With Synergy, you have a single view that links your contacts from a variety of sources, so accessing them is easier than ever. For example, if you have the same contact listed in your Outlook(2), Google and Facebook accounts, Synergy recognizes that they’re the same person and links the information, presenting it to you as one listing.
Layered calendars – Your calendars can be seen on their own or layered together in a single view, combining work, family, friends, sports teams, or other interests. You can toggle to look at one calendar at a time, or see them all at a glance.
Combined messaging – Synergy lets you see all your conversations with the same person in a chat-style view, even if it started in IM and you want to reply with text messaging. You can also see who’s active in a buddy list right from contacts or email, and start a new conversation with just one touch.

By smartly integrating your information, webOS seems to think ahead for you to keep you on top of the things that happen in your life, but that’s just the first step. The platform’s unique interface brings your information to you with the ease that only Palm can offer.

Run multiple applications at the same time – Palm’s revolutionary webOS lets you manage multiple activities more effectively than any other mobile platform today. It lets you keep multiple activities open and move easily between them like flipping through a deck of cards. You can rearrange items simply by dragging them; when you are done with something, just throw it away by flicking it off the top of the screen.(3)
Information at your fingertips – Finding what you need is easy with universal search – as you type what you’re looking for, webOS narrows your search and offers results from both your device and the web.(4)
Intuitive and unobtrusive notifications – When important things come up or new updates arrive, you’ll receive notifications with a diplomacy that’s a radical departure from other mobile platforms. For example, if you receive a text message or email, a scrolling notifications bar at the bottom of your screen lets you address it right away or leave until later. webOS alerts are one step ahead, ensuring that you never miss a thing, but never lose your place or train of thought.

Palm Pre Specifications

HSDPA/UMTS with EDGE/GSM
Integrated GPS(5)
Large 3.1-inch touch screen with a vibrant 24-bit color 320×480 resolution HVGA display
Gesture area, which enables simple, intuitive gestures for navigation
Slide-out keyboard (QWERTY in UK, Ireland and Spain, QWERTZ in Germany)
Email, including support for corporate servers with Microsoft Exchange(2), as well as personal email support (POP3, IMAP)
Robust messaging support (IM, SMS and MMS capabilities) (3)
High-performance, desktop-class web browser
Great multimedia experience and performance (pictures, video playback, music), featuring a 3-megapixel camera with LED flash and extended depth of field, and a standard 3.5mm headset jack
Bluetooth(R) 2.1 + EDR with A2DP stereo Bluetooth support
8GB internal memory (~7GB user available)(6)
USB mass storage mode
MicroUSB connector with USB 2.0 Hi-Speed
Proximity sensor, which automatically disables the touch screen and turns off the display whenever you put the phone up to your ear
Light sensor, which dims the display if the ambient light is dark, such as at night or in a movie theater, to reduce power usage
Accelerometer, which automatically orients web pages and photos to your perspective
Wi-Fi 802.11 b/g(7)
Ringer switch, which easily silences the device with one touch
Removable, rechargeable battery
Dimensions: 59.57mm (W) x 100.53mm (L, closed) x 16.95mm (D)
Weight: ~135 grams

An array of compelling accessories also will be available for Palm Pre, including the first inductive charging solution for phones (sold separately). Simply set Palm Pre down on top of the elegantly designed Palm Touchstone(TM) charging dock without worrying about connection, orientation or fit. Palm Pre is active while charging, so you can access the touch screen, watch movies or video, or use the speakerphone.

Availability and Pricing

Palm Pre is scheduled to be available initially in the UK, Ireland and Germany exclusively on the O2 network, and in Spain exclusively on the Movistar network, in time for the holidays. Pricing for the phone has not yet been determined.

Customers who would like to register to receive additional information about Palm Pre and be notified when it’s available can register at:

UK and Ireland: http://www.palm.com/uk-pre-notify
Germany: http://www.palm.com/de-pre-notify
Spain: http://www.palm.com/es-pre-notify

About Telefónica

Telefónica is one of the world’s largest telecommunications operators by market capitalisation. Its activities are centred mainly on the fixed and mobile telephony businesses, while its broadband business is the key growth driver underpinning both. It operates in 25 countries and has a global customer base of 260 million. Telefónica’s growth strategy is focused on the markets in which it has a strong foothold: Spain, Europe and Latin America. Telefónica is a 100% private sector company with its shares listed in Madrid and other stock exchanges and more than 1.5 million individual shareholders.

About Palm, Inc.

Palm, Inc. is a leading mobile products company, creating instinctive yet powerful mobile products that enable people to better manage their lives on the go. The company’s products for consumers, mobile professionals and businesses include Palm(R) Treo(TM), Palm Pre(TM) and Palm Centro(TM) phones, as well as software, services and accessories.

Palm products are sold through select Internet, retail, reseller and wireless operator channels throughout the world, and at Palm online stores (http://www.palm.com/store).

More information about Palm, Inc. is available at http://www.palm.com.

NOTE TO EDITORS: Media materials are available at:

UK and Ireland: www.palm.com/uk/press
Germany: www.palm.com/de/press
Spain: www.palm.com/es/press

Please add the tag #Palm#Pre to your tweets or “PalmPre” to your blog posts about the Palm Pre phone, and follow Palm on Twitter at www.twitter.com/palm.

(1) Use of this device requires providing a valid email address, mobile phone number, and related information for account setup and activation. Unlimited usage data plan strongly recommended; additional data charges may apply. Within wireless coverage area only. Number of applications and actual performance will vary depending on applications used and actions performed.

(2) Within wireless coverage area only. Requires data services at additional cost. Microsoft Exchange email is available for Exchange ActiveSync only and requires Microsoft Outlook using Microsoft Exchange Server 2003 SP2 or later. Additional fees may apply.

(3) Within wireless coverage area only. Use of some third-party web applications may impact performance.

(4) Searches web and user’s applications, contacts, and dialing information. Web search within wireless coverage area only, requires data services at additional cost.

(5) GPS requires data services at additional cost. Coverage not available in all areas at all times.

(6) Storage estimate subject to change based on system software and application usage.

(7) Within range of 802.11b/g Wi-Fi network. Some Wi-Fi hotspots require fee for usage.

Palm, webOS, Pre, Synergy, Touchstone, Treo and Centro are among the trademarks or registered trademarks owned by or licensed to Palm, Inc. All other brand and product names are or may be trademarks of, and are used to identify products or services of, their respective owners.

O2 were tipped by UK newspaper The Guardian last week as having clinched exclusivity for the GSM Pre, and this new Palm update certainly seems to confirm the parent-carrier’s involvement.  We’re set to meet with Palm UK later on today to hopefully find out all the details.

At time of writing, the “More information” link does not work; however, unless Palm have made significant changes in the past few weeks we’re not expecting to see a major difference between the GSM Pre and its CDMA cousin already on sale in the US.  That likely means a simple switch from EVDO Rev.A to HSDPA/HSUPA.

[via Engadget]

Front-runners in the carrier contest have always been Vodafone and O2.  Palm used the former for its demo GSM handsets while at Mobile World Congress back in February, but more recently O2 – who also exclusively carry the iPhone in the UK – were tipped to have clinched the deal.

There’s been at least one reported sighting of a Palm Pre in the UK, with what’s believed to be a field-tester playing with his smartphone on the London Tube earlier this week.  Given the competitive nature of the UK smartphone market, it’s entirely likely that we’ll see the Pre available free on certain high-cost monthly tariffs.