To judge by the runaway successes of the Apple iPhone and BlackBerry Storm, you'd think it was a great time to be a smartphone manufacturer.

Not according to Palm. The venerable handheld company today announced that it expects to post profits of between $180-190 million (£120-126 million) for the last quarter, down from the $367 million (£234 million) just three months ago.

The company euphemistically said that the slump was due to "reduced demand for [its] maturing smartphone and handheld products".

This is a polite way of saying that few people want to buy aging handsets running old versions of Windows Mobile and Palm OS.

Market woes

The economic chills aren't helping any, either, according to Ed Colligan, Palm's President and CEO: "We are seeing unprecedented dynamics in the global markets as economic uncertainty hampers demand for consumer products."

Palm is already committed to cutting jobs in America, consolidating its European operations and pulling Asia/Pacific sales back to its California HQ, all of which it hopes will save the company $20 million (£13 million) a year.

Despite the gloomy news, Palm continues to promise "next generation products" in the future, such as the long-delayed update to the Palm OS and, presumably, a new round of hardware, too.