Weak, disinterested carriers hurt Palm

February 26, 2010 4:32 AM EST

Shares of Palm dropped dramatically after it pre-announced its revenue on Thursday, but the company's failure to become a viable mobile player can be traced to its carrier partners.

Palm made a splash at the 2009 Consumer Electronics Show when it debuted its new WebOS operating system, slated to replace its aging Palm OS platform that brought it to fame.

But choosing Sprint as its launch partner dampened any hope it had of rebounding.

"They launched with Sprint which is a declining network," said Gartner analyst Van Baker. The company is "losing rather than gaining customers and suffers from being perceived as a small carrier in the US market."

Seeing poor results, Palm switched to Verizon, currently the largest carrier in the US, but not soon enough, according to Baker.

Verizon, one of the nation's largest suppliers of BlackBerry's, and recently, the premiere supplier of Motorola's Droid phone, the carrier spend little time doing much promoting for Palm.

In a memo sent to employees following the pre-announcement, Palm CEO Jon Rubinstein said Verizon acknowledged "their execution of our launch was below expectations."

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He goes on to re-ensure employees that the future is bright but industry experts believe the move may be too little, too late.

"Without solid earnings growth, we think the only reason to own the stock will be on the assumption that some news event will drive the price higher," said Deutsche Bank analyst Jonathan Goldberg. "We do not think this is a tenable basis for owning the stock."

This article is copyrighted by International Business Times, the business news leader