EXCLUSIVE: Struggling phone company Palm has pulled the plug on its Australian operation, according to company executives based in Singapore. A key contributor is believed to be reluctance by both phone carriers and retailers to stock the Palm Pre, a competitor to the Apple iPhone.The decision comes despite the company having a significant base of former Palm Treo and Centro owners. Executives of the company have failed to explain why they chose to exclude Australia in the launch of the new Palm, which is sold in Europe, the USA and Asia.

Calls and emails to US PR executives have not been returned. Calls to the Australian operation reveal that the company shut up shop some weeks ago, with a new company taking over their former office space. A Palm executive in Singapore who did not want to be named said, “We no longer operate in Australia. We have in place support arrangement for current customer but we have no office there anymore.”

Globally, Palm is struggling to compete up against the iPhone and the Blackberry as well as a new wave of Google Android-based Smartphones. A European analyst at the recent Mobile World Congress in Barcelona said that he doubted whether Palm would survive up against an onslaught of new smartphones from vendors like HTC, Samsung, LG and Android phone manufacturers.

He said, “If Palm is struggling in the mobile software market, you can see how hard it will be for Samsung to get its bada operating system up and accepted.”

Recently shares in the Palm climbed following speculation that Samsung had spoken to the company about a possible acquisition in an effort to get its hands on Palm’s operating system, which is capable of running applications sold on the highly successful Apple iPhone platform.

Currently Samsung is building its own operating system, called bada, in an effort to compete with application offerings from Apple, Google with its Android operating system, and Microsoft, which has recently introduced a new Windows 7 Mobile OS. 

Palm recently announced that global revenues for its last quarter was $191.6 million, this was down 13 per cent on the previous period. Profits were down 39 per cent.

The Company sold 599,000 smartphones in the quarter.

In recent months, Palm shares have lost more than a third of their value since setting a 2009 high on 30 September 2009.

Palm’s sales and marketing expenses for the Pre and Pixi phones jumped 64 per cent in the latest quarter, while total operating costs rose 21 per cent. The higher expense hasn’t helped Palm’s devices crack markets like Australia, where Research in Motion with its Blackberry and Apple with its iPhone, along with HTC, have gained share.

Palm’s net loss, the company’s tenth straight, narrowed to $85.4 million, or 54 cents a share, in the fiscal second quarter, compared with a loss of $508.6 million, or $4.64, a year earlier, when company had a tax expense.

After introducing the touchscreen Pre with a new Internet operating system in January at the 2009 CES, Palm started selling the device in June and added the smaller, cheaper Pixi last month.

In comparison, Research In Motion increased its share of the global smart-phone market to 20.8 per cent in the third quarter from 15.9 per cent a year earlier, according to researcher Gartner, while Apple lifted its share 17.1 per cent from 12.9 per cent in the previous quarter.