Rubinstein posts - Wireless

June 10, 2009 2:10 PM PDT

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.

Topics:: Corporate and legal

Tags:: Palm,; Rubinstein,; Colligan

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May 28, 2009 12:38 PM PDT

Palm shows Pre at D

by Ina Fried

35 comments

Palm showed the Palm Pre's rival to the App Store during its demo at D: All Things Digital on Thursday.

(Credit: Ina Fried/CNET)

CARLSBAD, Calif.--In one of the more anticipated chats at D: All Things Digital, Palm Executive Chairman Jon Rubinstein showed off the Palm Pre and talked about several features of the smartphone for the first time.

Rubinstein showed how the device can search Amazon's MP3 store and download songs directly to the device, a feature mentioned at the Pre's unveiling at CES in January. The Pre is scheduled to go on sale June 6 with a price tag of $199.99, after rebate.

He also showed a "media sync" feature that lets users grab nonprotected media files directly from iTunes without any special software. In addition, the universal search feature will not only search Google and Wikipedia, but also Twitter.

Palm also demoed an App Catalog that the company says will launch with the product in beta form. About a dozen programs will be there at launch, Palm said. Among the applications shown on the device were Fandango and the New York Times.

D impresario Walt Mossberg pressed Rubinstein on whether iTunes maker Apple will be unhappy with the feature. "They've gotten much more open," he said. "They've gotten rid of the DRM."

Venture capitalist Roger McNamee, whose firm is Palm's biggest shareholder, said he sees the media sync feature as an acknowledgment of iTunes' power.

"I find it hard to believe they are going to get bent out of shape," McNamee said.

Rubinstein did acknowledge that the Pre is going after the Apple iPhone, along with the BlackBerry devices from Research In Motion.

"Clearly the primary competitors are Apple and RIM," Rubinstein said of the Pre.

Palm: "a new company today"
Before the Pre demo, Rubinstein talked about the steps that got the company where it is.

"We hired a lot of new people into the company," Rubinstein said. "It's a new company today."

Asked what he brought over from Apple, where he had been a hardware guru, Rubinstein said, "I hope I've learned a little bit of taste. I've also learned how important great marketing is."

But Palm is not Apple, he said. "The difference is we're tiny. We're the real little engine that could."

McNamee said that, despite all their success, Apple and RIM have just two points of market share in the global phone business. "We are at the very beginning of a massive transformation," he said. "There was a lot of white space that Palm could step into."

Mossberg asked why Rubinstein and McNamee didn't just start their own company.

"Palm had tremedous assets," Rubinstein said, noting its brand, its history of innovation, and its intellectual property. "The DNA is there," he said. "The way of thinking about great products is there."

The talk began with a video in which McNamee makes all sorts of exaggerated claims about the Pre and Rubinstein constantly interrupts and corrects him. It's a reference to an earlier incident in which McNamee made claims that Palm later had to publicly disavow in a regulatory filing.

McNamee didn't stop with his hyperbole.

"I wish I had the entire fund in Palm," he said. " This is the thing that will define us."

Long live the OS
Asked about what other devices Palm might create, Rubinstein left the door open, but didn't give details.

"We designed the WebOS to work across a variety of products," Rubinstein said. A lot of thought was put into the WebOS that powers the Pre, he said.

"The old Palm OS lasted 15 years but had run its course," Rubinstein said. "We set out to develop a platform that will last us another 10 or 15 years."

Rubinstein said that Palm initially worked with just a couple dozen developers, but is now working with hundreds and has thousands more waiting in the queue.

As for the devices themselves, Rubinstein was asked to comment on reports that Best Buy stores may each have only four devices for launch.

"We are in full production with the Pre," Rubinstein said, adding that he expected there would be shortages because of the demand.

He noted that later this year there will be a GSM version, but declined to confirm a report that Verizon will start selling the Pre in six months time.

"We do love Sprint and they are our exclusive launch partner," Rubinstein said. "It sounds like AT&T and Verizon both want it. I can't comment on unannounced relationships."

On the enterprise side, Rubinstein said, the Pre not only has ActiveSync to get Exchange mail as well as the ability to look up addresses from a corporate directory and remotely wipe a lost phone. He also acknowledged that the security and other business features of Windows Mobile aren't there, pitching those concerned with that toward Palm's Windows Mobile-based Palm Pro.