Palm Responds To Production Halt ReportPalm Responds To Production Halt Report

According to a report coming out of Taiwan, Palm ceased manufacturing all of the handsets it currently sells, including the Pre and Pixi (Sprint) and Pre Plus and Pixi Plus (Verizon). Palm has officially responded to the report and set the record straight.The original report, circulated by the tipsters over at The Boy Genius Report, said that Palm was halting production at all its facilities. No reason for the shutdown was given, which led some to believe the worst. Here's what the full report says:

Taken at face value, here's what we can say about it.

First. Perhaps Palm over-produced its handsets and there are simply too many already stocked on shelves, in warehouses or in transit to the U.S. Palm could just be reducing output to meet demand (which appears to be very little).

Second. It's possible Palm temporarily halted production due to some legal snafu that it is currently working to sort out.

Third. Perhaps Palm ran into a supply chain issue and is lacking vital components to complete manufacturing these devices.

Fourth. Ok, it's also possible that there are some serious problems going on over at Palm. Maybe it has run out of cash, maybe it has been late on payments, maybe a million different things.

According to Palm, the company halted production in Taiwan in observance of the Chinese New Year. Production will be resumed at the end of February. Palm over-produced ahead of the shut-down to make up for the lost volume. I'll have a more efficient statement as soon as Palm delivers one.

Palm's director of corporate communication, Derick Mains, said in an email, "Palm regularly adjusts its product manufacturing levels to manage inventory. In anticipation of the Verizon Wireless launch and Chinese New Year, we increased production levels prior to February, and anticipate ramping production back up after the Chinese New Year ends."

So there you have it. No crisis.

Story updated at 3:45 EST to reflect Palm's statement.