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Shares of palmOne plunged 22 percent Friday after the company warned that its results for the current quarter will fall below Wall Street estimates because of delays by wireless carriers in rolling out the new Treo 650 smartphone.

palmOne said it now expects earnings of 21 cents a share on revenues of $280 million for the February quarter, well below estimates of 34 cents a share and $318 million in sales. The company maintained its outlook for its fiscal year ending in early June, but analysts said that quarter could be at risk too.

Rising inventories and falling margins also weighed on the stock, which was downgraded by Bear Stearns and Merrill Lynch.

It has been a rough month for palmOne and its new flagship device. In November, it became apparent that the handset's bundled less memory than the 32MB (23 available to the user) than expected because of a memory glitch caused by new file system implementation.

To help alleviate customer's concerns, palmOne promised to create a system upgrade for the Treo 650, and the also affected Tungsten T5 PDA, so the devices could manage and store data a lot more efficiently. Since this update could take a few months to develop, the company said, in the meantime, it would give a free 128MB Secure Digital card to all Treo 650 owners.

Treo 650
Although not a reinvention of the Treo 600, the Treo 650 fixes some weaknesses of the earlier model (why reinvent the wheel if it isn't broken), while adding some nice new features. The new Treo delivers an improved keyboard, high-resolution screen, e-mail, PIM functionality, Web browser, and phone capabilities. (We will publish our review of the Treo 650 shortly.)

The smartphone 650 measures 4.4 x 2.3 x 0.9 inches, weighs 6.3 ounces, and has an overall appearance similar to the Treo 600's. Like the earlier model, there is also a Secure Digital slot, which as of yet does not support palmOne's new Wi-Fi SD card. Treo 650's QWERTY thumb-keyboard has backlight and a more user-friendly design than the Treo 600s.

Unlike the Treo 600 and its 160 x 160 screen, the Treo 650 uses a high-resolution 320 x 320 display, which should make it easier to read documents and Web pages. The Treo 650 also integrates Bluetooth, a glaring omission in the previous model. Bluetooth lets Treo owners use wireless headsets and print to Bluetooth printers, for example.

As with the Treo 600, the Treo 650 includes a VGA camera for 640 x 480 or 352 x 288 pixel images. The Treo 650's camera is supposed to be better, however, with improved picture and video taking in low-light situations.

With the Treo 650, you also get a 312 MHz Intel XScale PXA270 processor and twice the memory, 32MB, of the Treo 600. As with the Tungsten T5, the memory is non-volatile, which means you won't lose your data in the event of a power drain.

Unlike the Treo 600's battery, the new smartphone's is removable. So you can carry an extra battery (sold separately), and swap it out for additional power on the fly.

A CDMA version of the Treo 650 is shipping from Sprint right now with a GSM/GPRS/EDGE quad-band (850/900/1800/1900 MHz) edition coming other carriers