Struggling Palm loses chief executive

Palm's chief executive, Carl Yankowski, has resigned from the company.

Palm's chief executive, Carl Yankowski, has resigned from the company.

Chairman Eric Benhamou will take over until a replacement is found.

Palm, which has suffered in the market downturn, has also announced that it has reached the final steps of an internal separation into two businesses.

"Palm did very well with consumers, but they let the business side go soft," said Martin Reynolds, an analyst at Gartner. "Yankowski had a consumer focus, so this puts Palm back on the footing to chase business users again."

The appointment of a new chief executive could help the company re-focus on the enterprise, which could mean new applications, services and technologies geared towards business users. Microsoft and its key Pocket PC partners, including Compaq, have received positive reviews from enterprise customers and taken some of the limelight off Palm in this area.

Palm is currently made up of two business groups: a Solutions Group, which designs the Palm handheld line, and the Platform Solutions Group, which develops the Palm operating system and licenses it to other vendors.

As part of the company's reorganisation plans, the Platform Solutions Group is expected to become an internal Palm subsidiary, operating independently, by the end of this year.

The split has changed Yankowski's role. He said in a statement that the chief executive role "no longer matches my aspirations", although he did not reveal his future plans.

An executive council, with Benhamou at its helm, will oversee Palm until a new chief executive is found. Other council members include David Nagel, Platform Solutions Group chief executive; Todd Bradley, company executive vice-president and chief operating officer of the Solutions Group; and Judy Bruner, Palm's senior vice-president and chief financial officer.

Palm's tumultuous year may have forced Yankowski to reflect on his role in the company, said Kevin Burden, an analyst at IDC.

"I think it's a recognition that Palm probably wasn't moving in the right direction in the past year," Burden said. "It might have been a revelation on [Yankowski's] side to see that he is not the person to take Palm in the direction it needs to be going.

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