Palm, once industry leader, seeks new path to survive - Technology

Mountain View, California: If anyone knows how best to survive a corporate near-death experience, it is Jon Rubinstein.

In 1997, the former Hewlett-Packard engineer was asked by Apple Inc.’s founder, Steve Jobs, to lead the then-struggling hardware engineering division at the company. Over the next nine years, Rubinstein and his team of engineers breathed new life into the company by helping develop the iMac and the iPod.

Those experiences should serve him well as he seeks to resuscitate Palm Inc., whose roots in Silicon Valley go back to the PalmPilot, the revolutionary handheld computer, and the Treo, which turned heads as one of the first smartphones.

In recent years, Palm lost its way. Its share of the smartphone market has been halved to about 16.9% over the last two years. First, Research in Motion Ltd (RIM) found the sweet spot of business users with its BlackBerry. Apple grabbed consumers’ fancy with the iPhone.

While cellphone makers such as Samsung Electronics Co. Ltd, LG Electronics Inc. and RIM brought out products to compete with the iPhone, Palm has told Treo loyalists and investors to be patient. They will need to be. Palm’s stock price is down 90% since its high in March 2000.

Roger McNamee, a partner in the venture capital firm Elevation Partners, brought Rubinstein into the company in June 2007 as part of Elevation’s deal to invest $325 million (Rs1,420 crore today) in Palm.

McNamee gave him a mission: shore up product design and software. Rubinstein scra-pped existing product plans. He has been recruiting top executives from Apple and Microsoft Corp. And he is focused on redesigning Palm’s out-of-fashion operating system.

On Wednesday, Palm was scheduled to announce the debut of a new smartphone, the Treo Pro. Slimmer and more elegant than current models, the new Treo will not solve Palm’s troubles, but its larger keyboard and screen that is flush with the phone’s chassis is more user-friendly than Palm’s old design.

The real test will come in the first half of 2009, when Palm plans to announce a next generation of software—and a new device—which it hopes will make it easier for consumers to surf the Web and network with friends.