As Palm Pre takes off, so does its CEO
Less than a week after Palm Inc. introduced its new Pre smartphone to a warm welcome from critics and consumers, the company said its chief executive, Ed Colligan, was stepping down.
Colligan, 48, will be replaced by Jon Rubinstein, 52, who has led Palm’s product development efforts since October 2007. An engineer by training, Rubinstein is also a former employee of rival Apple Inc., where he helped develop the popular iPod.
Palm’s $199 Pre was a hot topic last weekend when Sprint, the phone’s exclusive carrier, reported record early sales for a Sprint handset.
The burst of sales left many retail locations sold out of the phone, prompting Sprint to assure the public that it would be restocking stores with the Pre as fast as Palm could make them.
Meanwhile, Apple swooped in this week to grab much of the gadget buzz with the launch of the iPhone 3G S, its latest model of the blockbuster handset, which, along with Research in Motion’s Blackberry line, dominates the smartphone market.
Palm, based in Sunnyvale, Calif., is far behind the leaders.
“It’s a critical time for the company,” said Ashok Kumar, an analyst at Collins Stewart. “They can’t afford any mis-execution. They’ve had some stumbles out of the starting gate, and it remains to be seen whether they can fix it.”
Palm declined to comment on whether the change in chief executives had been planned. But it said Colligan, who has been with the company 16 years, would join Elevation Partners, a Menlo Park, Calif., private equity firm that owns a 33% stake in Palm.
The news was released after the close of trading. Palm shares fell 71 cents, or 5.6%, to $11.99, but rose as much as 43 cents to $12.42 in after-hours trading.
Apple shares fell $2.47, or 1.7%, to $140.25.