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Ina Fried


Richard Shim

Staff Writer, CNET

PalmOne announced on Monday that CEO Todd Bradley will step down, a move being seen as further evidence of the company’s reinvention.

Bradley, a former Gateway executive who joined Palm in June 2001, will step down Feb. 25 and serve as an adviser to the company through May. PalmOne President Ed Colligan will take on the role of interim CEO while the company conducts a search for a permanent head.

“Todd was an operations guy…PalmOne needs fresh leadership with the right vision to lead PalmOne into the wireless future,” said Pablo Perez-Fernandez, a research analyst at Stanford Financial Group. “Colligan is considered to be very knowledgeable about wireless.”

Bradley joined Palm when it was struggling with a glut of products and was credited with helping steady the company. However, analysts said new leadership might be needed as the company increasingly focuses on its Treo line of advanced cell phones.

For his part, Bradley said he had “accomplished what I set out to do.”

“The company is on a growth path, our product portfolio is exciting and competitive, and I have great confidence in the company’s current and future prospects,” Bradley said in a statement.

The company said Colligan will be a candidate for the permanent CEO spot.

Colligan, a former Handspring executive, was named head of the wireless business when Palm and Handspring merged to form PalmOne. He was named president last June.

PalmOne shares dropped more than 10 percent in after-hours trading following the announcement of Bradley’s impending departure. Shares changed hands recently at $23.65 on the Island ECN after closing regular trading at $26.59, already a 4 percent dip from the prior day.

Bradley’s move follows the announcement last week that the company’s supply chain head, Angel Mendez, was leaving the company to join Cisco Systems. Like Bradley, Mendez was a former Gateway executive. He joined Palm the same month as Bradley.

Palm rose to success in the late 1990s with its Palm Pilot organizer and several popular follow-up models. However, the company struggled with a glut of excess products as the market for electronic address book and calendar devices waned. At the same time, Palm struggled in its efforts to create new types of devices with built-in wireless abilities.

The company flopped with its i705 and Tungsten W models. In June 2003, Palm decided to buy rival Handspring, which was running low on cash but had the more popular Treo line of devices that combined cell phone and organizer abilities.

Since merging, the company has made some headway with the Treo 600 line, as well as with updates to its traditional organizer products, including the Tungsten E and Zire 72 products. The company has also strung together several profitable quarters over the past nine months, after a prolonged period of losses.

However, the market for devices without wireless access has remained stagnant, and the Palm operating system dipped behind Microsoft’s Windows Mobile in terms of new products shipped for the third quarter of last year.

As a result, Palm has been increasingly focused on its Treo line. Although well-regarded, the products face increasing competition from rival device makers such as Research In Motion and Hewlett-Packard, as well as from traditional cell phone makers such as Samsung and Nokia.

The company started shipping its latest Treo, the 650, late last year, but thus far, Sprint is the only U.S. carrier that is offering the device. Cingular Wireless is expected to offer the 650 soon, while several other carriers have been trying to push the older Treo 600 model at lower prices.