Though Palm Inc. managed to lower its losses in fiscal third quarter, it cautioned of considerably poorer revenue in the current quarter. Plummeting sales of the company's smart phones has caused a great amount of apprehension.

The sale of the company's Pre and Pixi smart phones haven't matched expectations. The reason for the drop in sales is that Palm Inc. has received great competition from gigantic corporations like Apple. Marketing by rival carriers has also impaired the sale of the phones.

Palm Inc. marketed its phones through Sprint Nextel Corp., Verizon Wireless-a combined endeavor of Verizon Communications Inc. and Vodafone Group PLC. However, the sale of the phones fell far behind what was anticipated.

Although Palm's new mobile operating system webOS gained accolades, the company has had to fight for breath to keep afloat in the crammed market.

The company on Thursday reported that its revenue rose to $349.9 million from last year's $90.6 million. It narrowed its losses to $22 million, or 13 cents a share, compared to loss of $98 million, or 89 cents a share, last year.

However, the company warned that owing to low sales of phones the revenue accruing in the last quarter could be drastically lesser.