Palm Chairman Takes The Reins, Says 18 Months Before New Products Debut
NEW YORK (Dow Jones)–Jon Rubinstein, the purported savior of Palm Inc. (PALM), officially took the reins as executive chairman and head of product development for the troubled smartphone maker.
Rubinstein assumed his position as Elevation Partners wrapped up its acquisition of a 27% stake in Palm. The private equity firm paid $325 million for the investment, and the company will pay a special dividend of $9 a share.
“I’m really glad it’s all official,” Rubinstein said in an interview with Dow Jones Newswires late Wednesday. “We’ve been rolling a bit, but we can really roll now.”
Rubinstein, who was instrumental in developing the iPod for Apple Inc. (AAPL), will take over a company that has a storied history of innovation but has recently faltered. The company embarrassingly scrapped the Foleo, a “companion” device for the Treo that was widely panned. The company warned it was delaying the release of a new version of its dated operating system.
A new operating system is among the chief priorities for Palm, Rubinstein said. He added it will take 18 months before new products come out.
“It’s a probably good target,” Rubinstein said. “These things take time.”
The executive declined to comment on any specific plans, but noted that he’s been at Palm for a few months working with the team. “We’ve already done significant analysis on the roadmap. We’re really setting up our plans for the future.”
Despite Palm’s recent troubles, Rubinstein said he was bullish on the prospects for the Centro, which is the company’s take on a consumer-focused smartphone. Research in Motion Ltd.’s (RIMM) Blackberry Pearl successfully made the crossover, and Palm is hoping to do the same.
“I’m glad we’re kind of leading on a good note with this product,” he said.
Rubinstein said Palm’s brand, its loyal customer base, and strong distribution capabilities were why he decided to join the team, and that he expects to be at Palm for a while. He believes he can utilize the company’s “strong DNA” in innovation to create new products. He declined to comment, however, on whether he would bringing in his own talent.
Rubinstein said he expects a smooth transition. He added the he “loved” working with President and Chief Executive Ed Colligan. “We complement each other,” he said.
Palm faces criticism because it pioneered an attractive market segment that everyone is currently jumping into. Samsung Electronics (005930.SE) has its Blackjack, Motorola Inc. (MOT) has its Q, while RIM dominates the business world with its Blackberry email device.
Rubinstein believes the smartphone market is a large enough segment to support multiple handset makers. “Clearly there’s room for more than one successful player, and Palm will be one of them,” he said.