SAN FRANCISCO (AP) -- Palm Inc. shares fell Tuesday as analysts raised concerns that the smart phones the company recently released through Verizon Wireless are not selling well.

The stock slid 66 cents, or 7.2 percent, to $8.45 in afternoon trading. In the past year, the stock has traded between $5.85 and $18.09.

In a client note Tuesday, Macquarie Research analyst Phil Cusick downgraded the stock to "Neutral" from "Outperform," citing "weak" sales checks at Verizon and increasing operating expenses resulting from higher-than-expected spending on promotions.

Verizon began selling upgraded versions of Palm's Pre and Pixi smart phones -- the Pre and Pixi Plus -- in late January. The original Pre and Pixi went on sale last year through Sprint Nextel Corp.

The phones use Palm's latest operating system, webOS. They are the company's latest attempt to regain share in the fast-growing smart phone market. Palm, which was a smart phone pioneer, has struggled for years as Apple Inc.'s iPhone and Research In Motion Ltd.'s BlackBerry have grown increasingly popular among both consumer and business users.

Cusick wrote that sales at Verizon are improving, but "off a very low base," and that checks show Palm's sales at Sprint haven't improved since Verizon started selling the new phones.

Labels: palm, pixi plus, pre plus, verizon

¶ posted by Jimmie Geddes, Editor @ 2/23/2010 03:20:00 PM