Two years ago, Palm's then CEO, Ed Colligan, rejected a proposal from Apple chief Steve Jobs to promise not to hire each other's employees, according to Bloomberg News.
According to Thursday's Bloomberg story, which cited unspecified "communications" between the two executives, Colligan in August 2007 said that Jobs' proposal was ill-considered. Jobs was worried about losing key Apple employees to Palm and said "we must do whatever we can to stop this," reported Bloomberg.
"Your proposal that we agree that neither company will hire the other's employees, regardless of the individual's desires, is not only wrong, it is likely illegal," Colligan told Jobs, according to the communications reviewed by Bloomberg.
A number of top figures at Palm once worked at Apple. Two months before the August 2007 communications cited by Bloomberg, Palm had announced that former Apple CFO Fred Anderson would be joining its board of directors and that Jon Rubenstein, who retired as head of Apple's iPod division in 2005, would join as executive chairman of the board.
In June of this year, Palm named Rubenstein as its CEO, replacing Colligan.
In August, former Apple staffer Jeff Zwerner became Palm's brand design chief. Other Apple execs who have jumped ship to Palm in recent months include Senior VP of Product Development Mike Bell and PR head Lynn Fox.
There's no love lost of late between the companies, with the Palm Pre a new up-and-comer for smartphone market share against the Apple iPhone. The two have most recently been squabbling over the Pre's compatibility with iTunes.
The Bloomberg story comes as the Justice Department is reportedly checking into possible hiring collusion among leading technology companies.
Tensions often run high between tech companies over executives moving between potential competitors. Apple last year got into a high-profile scrape with IBM over its hiring of Mark Papermaster from Big Blue.
Then-Executive Chairman Jon Rubinstein holds up the Pre at CES 2009.
(Credit: Corinne Schulze/CNET)This post was updated with more background information on Palm and at 3:10 p.m. PDT with analyst comment.
Palm announced Wednesday afternoon that Jon Rubinstein will become the new chairman and CEO of the smartphone maker. Ed Colligan will step down as Palm's chief after 16 years with the company.
Rubinstein joined Palm as executive chairman in October 2007 and will take over as CEO on June 12. Colligan will take some time off, then join Elevation Partners, the private equity firm that has a 25 percent stake in Palm. Rubinstein's appointment now appears to explain why it was him and venture capitalist and Palm backer Roger McNamee who showed off the Pre at last month's D: All Things Digital event.
In a press release issued by Palm, Rubinstein said, "I am very excited about taking on this expanded role at Palm. 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."
Colligan's departure means Palm is severing one of the last remaining ties to the company's days as a pioneer of the handheld market. As an early employee of Palm, Colligan left with Donna Dubinsky and Jeff Hawkins to form Handspring and returned when Palm bought Handspring in 2003. Colligan became CEO later, after Todd Bradley resigned in 2005.
Rubinstein is a former Apple executive, and retired as the head of the company's iPod division in 2005. Now, he takes over Palm right as the company begins to mount a comeback in the smartphone category by staking its Pre device directly against Apple's popular iPhone. The Pre was first introduced in January, but finally went on sale last Saturday.
Reviews of the Pre have been good, the general consensus being that it's a fine alternative to the iPhone. But while Pre sales have broken records at Sprint, the phone's exclusive carrier, they're low when compared to Apple's initial sales of the iPhone in previous years.
For many industry observers, Rubinstein's appointment was not a surprise.
"This had been a strange (management) relationship for quite a while," analyst Michael Gartenberg said. "It has been clear to most observers that Jon has been calling the shots for quite some time. This just formalizes it. It was very clear Palm's investors had brought Rubinstein in to run the company."
Palm's stock rose slightly, 2.25 percent to $12.26, in after-hours trading on the news.
CNET News' Ina Fried contributed to this report.
This was originally posted at ZDNet's Between the Lines.
Updated: Amid weak fiscal third-quarter results reported Thursday, Palm Chief Executive Edward Colligan said that the company is well positioned to launch the Pre and promised a road map of smartphones and an application ecosystem built on the company's new WebOS. Bottom line: Palm envisions an entire product line built on the WebOS.
Palm hasn't put a date on the Pre launch.
(Credit: Corrine Schulze/CNET)Palm didn't put a date on the Pre launch, but said the device and its software were "being polished up" and being certified from Sprint as the company prepares to ramp up manufacturing.
The big takeaway: There are no showstoppers for the Pre launch in the first half of the year. Chief Financial Officer Doug Jeffries also added that "there's an enormous amount of interest globally for the Pre." Palm execs weren't going to detail European partners, but did note that the Pre plan calls for a step-by-step addition of international partners. "Right now we're 100 percent focused on getting the Pre launched and the Sprint product out the door," said Jeffries.
On a conference call with analysts, Colligan provided an upbeat tone to what were predictably dismal results. The company reported a net loss of $98 million, or 89 cents a share, on revenue of $90.6 million, down from $312 million in the same quarter a year ago. Smartphone revenue fell 72 percent to $77.5 million.
"With these financial results it's easy to forget the progress we've made," said Colligan, who argued that strategically the company is on track.
Colligan said the company is well positioned to launch the Pre on time. "We are under no illusions about the hard work that remains with bringing the Pre to market," said Colligan. But he added that "I have never had more confidence in Palm's ability to bring a new product to market on time and at scale."
However, analysts asked Palm executives what made them comfortable that the Pre would launch on time. After all, the Treo Pro was delayed. Jeffries said Palm has been working "more collaboratively" with Sprint and the company understands the process to launch more. "It's never a slam dunk, but I'm as comfortable as I've ever been that we'll nail it," said Jeffries.
Colligan delivered the following points:
The company needs seamless execution on the Pre launch.
Palm is "working hard with developers to get applications ready at launch" and "aligning marketing efforts with Sprint."
Palm wasn't prepared to disclose a European partner for the Pre, but the company has some "excellent options."
The company plans to establish a WebOS ecosystem that goes "well beyond our base."
Palm wasn't going to discuss its cash burn situation in the fourth quarter, but said its latest move to raise capital gave the company enough headroom to launch the Pre.
The messaging from Palm can be boiled down to one statement: Look ahead. Jeffries said the company's cost cutting and the launch of the Pre--along with its WebOS--will "greatly improve" performance.
Indeed, Palm will need the improvement. Palm smartphone units plunged 42 percent to 482,000 in its fiscal third quarter ahead of the launch of the Pre.
The results were largely expected since Palm had already warned that its third-quarter results would be messy. The company in a statement said it is officially "proceeding through a challenging transitional period" ahead of the Pre launch.
If successful, the launch of the Pre, Palm's much ballyhooed device, will create a new era for the company. If the Pre fumbles, Palm could be in big trouble.
The third-quarter net loss included a bevy of items, but even under non-GAAP accounting Palm lost $94.7 million, or 86 cents a share. Inventories for the third quarter were $13.2 million, up from $8.89 million in the same period a year ago.
On the bright side, Palm recently raised capital that largely offset what it blew through during the third quarter. The company ended the third quarter with cash and equivalents of $219.4 million. Jeffries repeatedly noted that Palm had enough capital to give the Pre the marketing support it needs.
Also see: The war for mobile developers is on: Do you have to pick sides?
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