Thursday, August 20, 2009
Apple CEO to Palm: I’ll Quit Sniffing Your Org Chart if You Quit Sniffing Mine
Apple appears to have a particular affinity for the unwritten no-poaching agreements said to be so popular among the nation’s biggest tech companies. Earlier this summer, the New York Times reported that Apple may have quietly negotiated an agreement with Google not to hire away each other’s top talent. Now, Bloomberg claims that the company attempted to win a similar commitment from Palm, but was rebuffed.
Now we know why it was Palm executive chairman Jon Rubinstein and investor Roger McNamee on stage at the D conference last month talking up the Pre, and not CEO Ed Colligan: Colligan was on his way out. On Wednesday, Palm tapped Rubinstein as its new CEO. 
Palm investor Roger McNamee isn’t drinking his own Kool-Aid, he’s drowning in it. In an interview with Bloomberg, McNamee–co-founder of Elevation Partners, which owns 39 percent of Palm–claimed iPhone owners will switch en masse to the Palm Pre when their contracts expire.
The debut of the Palm Pre can’t come soon enough for the long-suffering handset maker. Palm reported preliminary results for its third quarter after market close Tuesday, and they were ugly, to say the least. 
This just in from the N.S. Sherlock Institute for the Bleeding Obvious: Palm’s new bet-the-company operating system, webOS is intended as a replacement for, not an alternative to, its embarrassingly antiquated Palm OS. Speaking at the Thomas Weisel Technology & Telecom Conference today, Palm CEO Ed Colligan said the company won’t release any more Palm OS-based products after the Centro hits end-of-life.
CEOs and Palm evangelists convinced that the company’s new Pre handset is anything more than table stakes at the handset poker game would do well to consider two bits of Apple news and rumor that suggest Cupertino may be hard at work on a next-generation handset capable of mercilessly beating all others into sobbing submission.
Palm bet the company on a new handset today. It’s called the Palm Pre, though given the company’s faltering business, a better name for it would have been the Palm Hail Mary. It seems a slick little device. But is it formidable enough to stand its ground next to Apple’s iPhone? Palm certainly seems to think so. In fact, the company is so confident in the Pre that CEO Ed Colligan seems to think it won’t need a sub-$200 price point to pull market share from Apple.
Is it too late for Palm? Elevation Partners doesn’t think so. The private equity firm has agreed to make an additional $100 million investment in the foundering smartphone maker, which last week reported an abysmal second quarter and its sixth consecutive loss. 
The invitation-only event Palm plans to hold during the 2009 Consumer Electronics Show in early January promises “all that Palm New-ness you’ve been waiting for.” And after five straight quarterly losses and a year in which it lost two-thirds of its market value, Palm best deliver on that promise. 
When he was asked in 2006 about rumors that Apple was developing a smartphone, Palm CEO Ed Colligan scoffed at the idea. “We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.” Two years later, Palm is announcing layoffs and Apple is the world’s third-largest mobile phone supplier in terms of revenue….
