Is Palm going down the shitter?

Things aren’t looking good:

Palm Inc., maker of the Treo e-mail phone, posted its third straight quarterly loss as customers defected to Apple Inc.’s iPhone and new BlackBerrys made by Research In Motion Ltd.

The third-quarter loss was $31.5 million, or 30 cents a share, compared with a profit of $11.8 million, or 11 cents, a year earlier, Palm said today in a statement. Revenue fell 24 percent to $312.1 million in the period ended in February, missing analysts’ estimates.

Palm slashed jobs and closed its retail stores last quarter to curb costs as sales declined. The company has failed to update its product designs fast enough to compete with the BlackBerry or the iPhone, introduced in June. Palm said today it doesn’t expect to return to profitability this quarter.

The bold is my emphasise but it highlights a critical problem the company faces.

The next 18 months will in my view be the make or break for the company (I wouldn’t be surprised if it’s bought out) given the strength and vitality of it’s competition.