Is Palm Stepping On 'Pre' Buzz With CEO Change?

Just days after launching the Palm Pre on Saturday, Palm has named Jon Rubinstein as its new chairman and CEO, replacing Ed Colligan in a move that continues efforts by the handset maker to try to capitalize on what it sees as a new era in its history.

The news isn't too surprising. While Colligan appeared to be well respected in the industry, he's still charged with being at the helm during Palm's downward spiral during his 16 years of leadership.

Two years ago, Elevation Partners, backed by venture capitalist Roger McNamee and U2's Bono, bought a 25 percent controlling interest in Palm and brought in Rubinstein as the company's executive chairman -- a move aimed at turning the beleaguered handset maker around. Palm also said in a statement that Rubinstein, a former senior executive at Apple (NASDAQ: AAPL) "joined Palm ... to help bring innovation back to the company."

Palm's new chief will be charged with nothing less than resurrecting Palm as a viable challenger in the fiercely competitive smartphone market while overseeing the roll out of a new ecosystem built around the Pre and webOS, the device's operating system.

Let's think it through (which I'm sure Palm already has). Your company has just launched a major product designed to spearhead its turnaround. It's getting good reviews and buzz, though still facing an uphill struggle against more popular competitors (the iPhone and BlackBerry). Then you announce you're dumping the CEO.

So what are the media and customers talking about now? The new product or the changes in upper management? And do those changes instill confidence in consumers, or just the opposite? Do consumers see a company determined to rebound or an organization in turmoil? Maybe they see neither and are interested only in the product. But how do you separate your opinion of the product (and support) from your assessment of the company's health?

It'd make a fascinating case study for a business school. You can argue the merits of each option that Palm no doubt considered: 1) Making the CEO change well before the launch 2) Making it well after the launch, when the Pre hype has faded, or 3) Doing what the company just did.

Gartner analyst Ken Dulaney is quoted as praising Rubenstein, but doesn't address the timing issue. If it were my call, I would have gone with option No. 1. That way you get the management change and media fallout behind you, then focus on the Pre launch. Then it really looks like the new guy is leading the company into a new era. But for some reason Palm neglected to consult me on this. I hate when companies do that.

I'd be curious to see what readers think. Feel free to weigh in with a comment below.