Back in July, at $6.55 a share, I argued that Palm (NASDAQ:PALM) would burn your portfolio. A poor balance sheet and sagging growth left me convinced that this one-time smartphone superstar had lost its mojo.

Fast-forward three months. Palm is down more than 50%, has more debt than equity, and ranks below Apple (NASDAQ:AAPL), Research In Motion (NASDAQ:RIMM), Motorola (NYSE:MOT), and the industry average in customer satisfaction, according to a recent J.D. Power and Associates survey.

Worse, Palm has fallen so far, so fast, that it no longer ranks in the top five as a global smartphone vendor. Once again, here are the numbers:


Q3 2008 Shipments

% Market Share

Q3 2007 Shipments

% Market Share


15.485 mil


16.025 mil



6.899 mil


1.107 mil


Research In Motion

6.051 mil


3.298 mil



2.313 mil


2.058 mil


High Tech Computer

2.308 mil


.850 mil



6.791 mil


7.816 mil


Source: Canalys.

Apple was a big winner; Nokia (NYSE:NOK) was somewhat a loser. But Palm finds itself tossed into the "Other" category, lumped in along with all the second-tier smartphone vendors that were all huge losers.

Can anything reverse this trend? One critic of my summertime criticism said that Palm is working on a new OS, and that, once it's released, a new breed of Treos and Centros will gobble up market share.

Color me skeptical. Not only did Palm last week file a shelf registration to raise capital via new shares or debt but there's little we know of the new "Nova" OS, other than that it's scheduled for 2009, based on Linux, and will be at least several months behind Google's (NASDAQ:GOOG) Android as an alternative.

And did I mention that there's a recession looming? Put away the lighter, Fool. This stock will still burn your portfolio.

Brrrrrrrring! It's related Foolishness calling:

Apple is a Stock Advisor selection. Google is a Rule Breakers recommendation. Nokia is an Inside Value pick. Try any of these market-beating services free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers had stock and options positions in Apple and Google and a stock position in Nokia at the time of publication. The Motley Fool's disclosure policy was hanging out at a local Internet cafe when Tim wrote this and is still strung out on the triple espresso he ordered for it.

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