Losses for Palm despite high Treo sales

Despite rising Treo smartphone sales,Palm faces a tough battle to reverse its decline in fortunes after it announced a $840,000 (411,600) loss in the last quarter, compared to a $16.5 million (8.1 million) profit for the same period last year.

The handheld maker's share price fell by five per cent on the news and may have fallen by much more had the company not out-performed Wall Street expectations by registering a 21 per cent increase in smartphone sales.

But while Palm CEO Ed Colligan was trying to focus on the 689,000 smartphones sold in the quarter, analysts and investors pointed to Apple iPhone sales in excess of one million over a shorter period.

Palm has never sold that many smartphones in a single quarter, though that may change with the release of the $100 (50) Centro and new Treo models.

"The launch of our Palm Treo 500v with Vodafone and the Palm Centro with Sprint in September demonstrate our commitment to delivering competitive, high-quality solutions and expanding our reach to a broader market and range of customers," Colligan claims, referring to the 95 per cent of consumers yet to be tempted by a smartphone.

Colligan reminded investors the company had also received $725 million (355 million) of new funding. Much of that will go on the development of new handhelds running Palm's new Linux-based operating system.