Palm (PALM) chairman Jon Rubinstein, a former Apple executive, will become Palm’s CEO. Current Palm CEO Ed Colligan will move to Elevation Partners, the private equity firm that owns a big chunk of Palm.
Rubinstein joined Palm in 2007 and has led the company’s Hail Mary comeback: Its new Pre smartphone and the webOS platform behind it. Early reviews of the Pre are very positive, but time will tell if Palm can take any meaningful share from rivals like Apple (AAPL) and BlackBerry maker Research In Motion (RIMM).
This is probably a good move, because Palm was simply too stale under Colligan. And while there’s no guarantee that Palm will be financially successful with the Pre, it has done under Rubinstein’s watch what few companies are able to do — completely reinvent their technology and products.
What makes this a curious move: The next steps in Palm’s comeback are not necessarily engineering-focused — where Rubinstein excels — but are centered around business development and marketing. (That might explain why Rubinstein has recently become more visible. For instance, he and Elevation’s Roger McNamee — not Colligan — represented Palm at the All Things Digital conference last month.)
Rubinstein and his lieutenants must now convince wireless carriers around the world to carry and promote the Pre and other webOS smartphones, while competition intensifies from the likes of Apple, RIM, Nokia, Google, and Microsoft. And they must convince software developers to write apps for webOS despite a small initial user base — and no growth guarantees.
Years ago, Palm was a smartphone pioneer with its Treo line, which it acquired — along with Colligan — from Handspring, itself a Palm split-off. But as rivals pushed out newer, more sophisticated smartphones, the Treo got old.
Meanwhile, Colligan dismissed and severely underestimated the ability for companies like Apple to compete in the mobile phone market.
“We’ve learned and struggled for a few years here figuring out how to make a decent phone,” Colligan reportedly said. “PC guys are not going to just figure this out. They’re not going to just walk in.” Apple has since become the darling of the industry, while Colligan had to hire Rubinstein — and a bunch of Apple engineers — to ape the iPhone as fast as possible.
At Apple, Rubinstein was known to some as the “podfather” because of his instrumental role in developing the iPod, the MP3 player that led Apple’s comeback.
Here’s the release from Palm:
Palm, Inc. (Nasdaq: PALM) today announced that its board of directors has appointed Jon Rubinstein to lead the company as Chairman and CEO upon the departure of Ed Colligan, who is stepping down after sixteen years of leadership at the company. Rubinstein, who joined Palm as Executive Chairman in October 2007 to help bring innovation back to the company, assumes his role as CEO on June 12. Colligan plans to take some time off, then join Elevation Partners.
“I am very excited about taking on this expanded role at Palm,” said Rubinstein. “Ed and I have worked very hard together the past two years, and I’m grateful to him for everything he’s done to help set the company up for success. With Palm webOS we have 10-plus years of innovation ahead of us, and the Palm Pre is already one of the year’s hottest new products. Due in no small part to Ed’s courageous leadership, we’re in great shape to get Palm back to continuous growth, and we plan to keep the trajectory going upward.”
“I’m very proud of what Palm has accomplished so far,” said Colligan. “We pioneered two major product categories and I believe we are on our way to defining the standard for the mobile web. I’m extremely proud of our team, and grateful to have played a role in turning Palm around. I know that Jon, the Board and the Palm executive team will do an incredible job driving Palm to new heights.”
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