Smartphone Wars: What The Heck Happened To Palm?

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Palm has tried to innovate beyond the five-year-old Treo with little effect. It announced with great fanfare last year that it would build the Foleo, a cross between a smartphone and notebook computer, only to cancel the project three months later. While cellphone makers like Samsung, LG and R.I.M. 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 percent since its high in March 2000.

Mr. Rubinstein, the executive chairman, said he is convinced he can bring Palm back. "Everyone is trying to make an iPhone killer," he said. "We are trying to make a killer Palm product."

Roger McNamee, a partner in the venture capital firm Elevation Partners, brought Mr. Rubinstein into the company in June 2007 as part of Elevation's deal to invest $325 million in Palm. (Elevation now owns a 25 percent stake.) Mr. McNamee gave him a mission: shore up product design and software. Mr. Rubinstein scrapped existing product plans. He has been recruiting top executives from Apple and Microsoft. And he is focused on redesigning Palm's out-of-fashion operating system.

On Wednesday, he and Ed Colligan, Palm's chief executive, will announce the debut of a new smartphone primarily for business customers -- the Treo Pro.

(NYT graphic worth seeing: Palm's market share is still larger than that of Apple, but the trend is obvious.)

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