Palm CEO: Expects To Launch On More Carriers In 2nd Half FY10

Palm Inc. (PALM) plans to launch its new line of phones on more carriers in the second half of the fiscal year, according to Chief Executive Jon Rubenstein.

Palm currently only sells the Pre and the upcoming Pixi on Sprint Nextel Corp. (S) in the U.S. Industry observers say the company needs to expand to different carriers in order to boost sales.

"We're executing a methodical plan to roll out WebOS in the U.S. and overseas," he told analysts during a conference call on Thursday. He added the company was being selective about the carriers it partners with.

That will become more of an issue going into the holiday season, when Palm's phones compete with a strong line-up of smartphones sold through Sprint. Rubenstein said he believes the Pre and Pixi will be "front and center" at Sprint stores for the holiday season.

The price cut of the Pre to $150 from $200 was done to position the company for the holiday season, Rubenstein said.

In the fiscal first quarter, Palm sold 823,000 smartphones but refused to break out how many were Pres. Rubenstein said a vast majority that ultimately ended up in consumers' hands were Pres.

Palm boosted its marketing and research and development spending in fiscal second quarter, according to Chief Financial Officer Doug Jeffries.

The company is looking to shore up its lack of applications - a weakness when compared to the Apple Inc. (AAPL) iPhone or phones using Google Inc.'s (GOOG) Android software.

Jeffries said the company will focus on its WebOS platform developers.

Rubenstein, meanwhile, said the company will devote its resources to developing the WebOS platform. The company is dropping its support of the original Palm operating system.

Palm shares fell 3.7%, to $13.90 in after-hours trading.

-By Roger Cheng, Dow Jones Newswires; 212-416-2153; [e-mail]