Steve Jobs Asked Palm Not To Hire Apple Employees

Two years ago, Apple had turned the collective smartphone market on it’s ear with the release of the Apple iPhone. At the time, Palm was struggling to get their next generation OS project on track and dealing with an aging product line. In June of 2007, Apple launched the iPhone. To help with this revolutionary new product, Apple had hired 2% of Palm’s employees, clearly to gain insight into years of working with smartphones. Palm had just hired Jon Rubinstein, who is well known for his contributions to the iPod”. It was at this juncture that Steve Jobs reportedly reached out to Palm and asked them to refrain from hiring each other’s staff.


Palm’s CEO Ed Colligan, to his credit, refused and in so many words said,

“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.”

Bloomberg states that Jobs said, “We must do whatever we can to stop this.” He went on to say that Apple had more patents and money than Palm, if Palm were to consider a legal fight.

So why are these coming to light two years after the fact? Bloomberg apparently received the communications from a Palm spokesperson, in a move that many see as posturing as the US Department of Justice investigates collusion practices between Apple, Google and others. Clearly, there is no collusion between Palm and Apple. This latest volley won’t curry Palm any favor with Jobs, so we can expect the battle to rage on.

[via Engadget]

Palm CEO Ed Colligan Talks Up Palm OS 2.0

In an interview with Australian tech site APC, Palm’s CEO Ed Colligan revealed the company’s plans for the next generation Palm OS they company is calling Palm 2.0 along with plans for a new “prosumer” brand that will “slot between the Centro and Treo lines”.

How Palm Is Dealing With Competition

The interviewer did not shy away from asking Colligan difficult questions surrounding the future of the company. Competition in the smartphone space is fierce. BlackBerry owns the Enterprise market, Windows Mobile devices have seen huge gains, Apple has burst onto the scene with the iPhone and Google is preparing to deliver it’s Android OS which will surely prompt a slew of Google phones into the market. With this crowded and competitive space, how does Palm compete. "Palms got maybe 15 million customers and 50 million devices around the world, its brand thats globally recognised. We sold a million Centros in the first five months of it going on sale with one carrier in the US, so to say were not an active player in the market is not really accurate," said Colligan. He certainly reads the continuous barage of negative media coverage surrounding Palm products and likens his company to Apple when they experienced their dark days. "If you look at Apple and one of our board members, Fred Anderson, used to be CFO at Apple at one point in time Apple was in a very difficult position and (Anderson) was there at that time, trying to figure out how they had the resources and the cash to see the next quarter through. Apple was on the cover of every magazine, (we saw) all these articles about the demise of Apple, and now theyre one of the most successful brands in the world."

Next Generation Palm OS 2.0

Collligan referred to Palm’s next generation operating system, codenamed Nova, as Palm OS 2.0. Interestingly enough, Colligan pointed to his Centro saying, “This is something different to this.” Palm’s next-generation operating system with much more capabilities, driven around the Internet and Web-based applications. Palm is banking on their ability to integrate software and hardware to enhance the user experience. From Colligan’s comments, it appears that Palm will deliver multiple devices under the new brand. "We think its going to be stunning and breakthrough in its execution, and were working on some very exciting new devices to go with it." One might even be the illfated Palm Foleo.

New Product Lines

The launch of the next generation Palm OS will also bring a new product line that will fit between the existing Palm Centro and Palm Treo Smartphones. The Centro is considered Palm’s consumer line and the Palm Treo is now being thought of as strictly enterprise. From Colligan’s comments, it certainly appears that we’ve seen the end for the Palm OS on Treo branded smartphones. "Were going to continue to look at those three line areas consumer, prosumer and enterprise. Treo is today more of our mainstream prosumer product which is extended into the enterprise, but over time youll see some branding work done on the top two to make sure theyre really well delineated," continued Colligan. One must wonder if Palm is simply distancing themselves from the Treo brand that has been the subject of harsh criticism of being a stagnant form factor, if not platform.

Apple’s return to glory started with the iconic all-in-one design of the highly sucessful iMac, a hardware product that help usher in the release of Apple’s linux based operating system. Their breakout success however due to the iPod/iTunes, where they were arguably first to market. In 2009, Palm will to their linux based operating system to usher in new devices under a new brand. Palm has a difficult challenge as they attempt to create that "wow" product in a field that includes the Apple iPhone and BlackBerry Bold. Given Palm’s rich history of innovation, they are certainly one company that can pull it off.

Source: APC Mag

Palm Reports Fiscal Results, Insight Into Future Products

Palm today reported a third-quarter net loss of $31.5 million, or 30 cents a share. Palm Centro smartphone sell-through reached a company high, totalling 833,000 units. "Centro is off to the strongest start of any smartphone in Palm’s history," said Ed Colligan, Palm president and chief executive officer. Palm executives offered insight into future Treos and the upcoming OS. "Those products aren’t coming out this quarter," said Colligan when asked about the release of new Treo smartphones during the upcoming fiscal quarter. Colligan did reaffirm that the company is on track to deliver their next generation operating system by the end of the calendar year.

The company expects the "first half fiscal 09 to be a turning point in the business". The company plans to continue to expand Centro distribution globally, expecting Centro growth to help offset declining growth in Treos. When asked about the Centro in the US, Colligan acknowledged "opportunities" exist with other carriers. With the new operating system will bring new Treo devices. While Palm typically does not comment about new devices, company executives are "excited about designs on the table." New Windows Mobile Treo products targeted to higher end enterprise business are expected this year. While the new operating system might be completed by the end of 2008, it wasn’t clear if products running the new OS would be available, with the possibility of new Treo devices not hitting shelves until 2009.

Earnings Details

Net loss applicable to common shareholders for the quarter was $31.5 million, or $(0.30) per diluted share. Net loss included stock-based compensation expense of $6.2 million, amortization of intangible assets of $1.0 million, restructuring charges of $12.3 million and accretion of series B convertible preferred stock of $2.4 million. This compares to net income for the third quarter of fiscal year 2007 of $11.8 million, or $0.11 per diluted share.

Net loss applicable to common shareholders in the third fiscal quarter, measured on a non-GAAP(1) basis, totaled $17.0 million, or $(0.16) per diluted share, excluding stock-based compensation expense, amortization of intangible assets, restructuring charges and accretion of series B convertible preferred stock and adjusting the related income tax provision to 26 percent. This compares to non-GAAP net income in the third quarter of fiscal year 2007 of $16.5 million, or $0.16 per diluted share, which excluded the effects of stock-based compensation, amortization of intangible assets, an in-process research and development charge and adjusting the income tax provision to 40 percent.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, totaled negative $28.4 million. EBITDA, adjusted to add back stock-based compensation, other non-operating expense and restructuring charges, or Adjusted EBITDA, totaled negative $9.5 million.