UPDATE: Palm Names Chairman Rubinstein As Chief Executive

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   DOW JONES NEWSWIRES 
 

Palm Inc. (PALM) named former Apple Inc. (AAPL) executive Jon Rubinstein as its chief executive, as the hand-held maker steps up efforts to compete against the iPhone.

Rubinstein, 52 years old, joined Palm as executive chairman in October 2007 - having left his post in 2006 as senior vice president of Apple's iPod division - in an attempt to help bring innovation back to the company. He is replacing Ed Colligan, who is stepping down after 16 years with Palm.

The appointment comes at a critical time for Palm, which released its much-hyped Pre smart phone over the weekend. The spotlight was stolen somewhat when Apple on Monday unveiled a new-generation model of its iPhone, and halved the price of its entry-level model to $99.

Palm shares jumped 3% to $12.35 in after-hours trading after closing the regular session down 5.6%.

"I am very excited about taking on this expanded role at Palm," Rubinstein said. "Ed and I have worked very hard together the past two years, and I'm grateful to him for everything he's done to help set the company up for success."

Rubinstein's appointment is effective Friday. He will remain executive chairman.

Colligan intends to take some time off before joining Elevation Partners, a venture-capital firm that has invested $425 million in Palm.

In March, Palm said its fiscal third-quarter loss widened as the company's smart-phone sales plummeted in what it called a "challenging transitional period" ahead of the launch of the Pre touch-screen phone. Some analysts have expressed concern about the rapid decline of its aging product portfolio, but the Pre saw strong sales over the weekend.

-By Lauren Pollock, Dow Jones Newswires; 201-938-5964; [e-mail]