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Palm's Signals Weaken

Stocks in this article: PALM T VZ S AAPL

SUNNYVALE, Calif. ( TheStreet) -- Palm (PALM) creeps along under its own support.

With Palm's paltry sales and little enthusiasm for the brand at Verizon (VZ), Palm investors have been looking ahead with hope to the arrival of the Pre and Pixi at AT&T (T). But if analysts have picked up the right signals, you might not get the sort of fanfare you expected at Ma Bell.


Earlier this week, AT&T said it will start selling Palm phones in the "coming months," but offered no timing or pricing details. In a chat at the CTIA 2010 show in Las Vegas Tuesday, AT&T voice and data chief Mark Collins indicated that Palm was pretty much a show-me situation.

"AT&T noted that it would carry the devices only as long as it remains a viable competitor," JPMorgan analyst Mike McCormack wrote in a research note after an interview with Collins.

The news of tentative support from AT&T comes as speculation circulates around Verizon's continued interest in carrying the Palm phones. As readers might recall, Verizon effectively snubbed Palm's slow-selling phones early this year, when so much of the company's attention was focused on promoting the Motorola (MOT) Droid.

Palm sales at Verizon proved to be a bust last quarter, leaving Palm with a mountain of inventory and an alarming sales shortfall.

Verizon declined to comment on whether it would drop the Palm phones.

"We're not in the habit of sharing our promotional plans with our competitors and we're not going to start now," said a Verizon rep.

Palm has been a frustrating case for investors this year. The phones and the WebOS operating software are considered quite solid, but everything else about the story is weak. Palm started by picking the wrong exclusive partner with weak No. 3 player Sprint (S), where sales slumped last year. Palm also lacked the marketing muscle to help the phone stand out from the growing smartphone pack.

Palm's recognition will continue to fade this year as bright new stars jump on the smartphone stage. Just this week, HTC and Sprint introduced the HTC EVO, a 4G WiMax phone due out this summer. And Samsung unveiled an Apple (AAPL) iPhone lookalike called the Samsung Galaxy S, a Google (GOOG) Android-powered touchscreen phone.

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