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Palm Centro moving to Quad Band GSM with AT&T Mobility

The move to use a quad-band GSM format for the Centro smart phone using AT&T Mobility as its carrier has proved to be beneficial for Palm Inc in terms of bringing up sales and financial status.

The Palm Centro smart phone was first introduced by the Sprint Nextel Corp during the last quarter of 2007. Their contract has now ended since they only had an agreement of limited exclusivity. They had a good start with Sprint Nextel, selling most of their Centro smart phones. Unfortunately, there were issues on the shortage of certain components which limited their capacity to supply their distributors with enough units. This problem was overcome when AT&T Mobility launched the GSM format version of the Centro smart phone.

With this quad-band format for GSM, Palm Centro users are capable of using their phones even on foreign lands. This saves a lot of dollars for those AT&T subscribers with the Palm Centro smart phone that sports the quad-band format.

The need to make the Palm Centro quite attractive on the market is vital for the company to halt its decrease in their share in the market, where a major portion of it is held by cell phone company Research in Motion Ltd for several years, as well as plan for the future of Palm Inc.

On the finances of Palm Inc, they were able to raise a total of $350 million using a new financing on a private equity, an increase in debt, and tackled cost structure in order to lower down the breakeven point. Due to the vast sales of the Palm Centro, a decrease of 6% was seen in the margins of Palm Inc, based on data from Dow Jones. According to Palm CEO Ed Colligan, the Palm Centro has enticed customers to upgrade to it instead of their feature phones, generating more income and revenues.

On the technical side, Palm is now looking into using an operating system based on Linux as well as a platform for its product to keep ahead of other cell phones in the market.

To have a definite view on the future of the Palm Centro smart phone and to find out if the steps that the company is taking worth its while, a scrutiny on the financial figures of the previous fiscal year will be made. Hopefully, the figures will give a positive response on the effort exerted by Palm Inc.

According to a Morgan Keegan analyst, Tavis McCourt, the things that Palm has to do to be able to reposition are the following: first, lower cost structure successfully; second, provide a new platform that is even half decent to be able to make new changes on their previous line, the Treo; thirdly, produce a new product that will produce a spike in the sales and consider it a hit. He also mentioned that looking back at the calendar, it was the Centro smart phones that have made the other smart phones produced and sold in mass quantities in the market.