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The company blames the shortfall on "reduced demand for maturing smartphone and handheld products."

The company's Treo range of handsets is now beginning to look positively decrepit alongside the likes of the Apple iPhone, RIM BlackBerry Storm and Nokia E71.

The company is hoping that its new Nova operating system - due out in the first half of next year - will help turn the tide, although

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Palm will have to embark on further cost-cutting measures in the meantime.

Last month, the company announced it had begun making job cuts as it "consolidate resources and focused our efforts more effectively".

Now, the company says it will reduce operating costs by 20% within six months with US job cuts, consolidation of its European offices and by moving its Asian marketing and sales offices to the US.

"We are seeing unprecedented dynamics in the global markets as economic uncertainty hampers demand for consumer products," claims Ed Colligan, Palm's president and CEO.

"In order to ensure Palm's long-term success during these uncertain times, we're taking several steps to significantly reduce our cost structure. These measures will help us navigate this difficult period while launching our next-generation products as planned."