Palm Inc reported a wider-than-expected quarterly loss as consumer demand for its smartphones weakened due to increased competition, sending shares down 4 percent on Thursday.

The maker of the Pre and Pixi phones reported a net loss of $81.9 million, or 54 cents a share, in its fiscal second quarter ended November 30, versus a year-ago net loss of $506.2 million, or $4.64 a share.

Excluding items, Palm posted a loss or 37 cents a share, which was wider than the average analyst forecast for a loss of 32 cents, according to Thomson Reuters I/B/E/S.

The company said it shipped a total of 783,000 smartphone units during the quarter, up 41 percent from last year.

But smartphone sellthrough units -- which reflect how many phones actually end up in consumers' hands -- totaled only 573,000, which was down 4 percent from the year-earlier period and 29 percent lower than the previous three months.

Sell through, which reflects sales from carrier customers to subscribers, was disappointing. We thought it would be disappointing and it was even weaker than we expected, said Matt Thornton, an analyst at Avian Securities.

Shares of Sunnyvale, California-based Palm closed at $11.72 on the Nasdaq and fell to $11.25 in extended trading.

(Reporting by Gabriel Madway; Editing by Gary Hill)