Palm Taps AT&T Exec to Head OS Unit

After a summer of trying to turn itself around, Palm Inc. last week named David Nagel to head the handheld computing vendors new operating system subsidiary.

Nagel, the former chief technology officer at AT&T Corp., will become president and CEO of the Palm Solutions Group at a time when Palm is facing economic troubles in a lagging economy.

In July, Palm announced that the company will form the separate subsidiary for its software business. Nagel, then a Palm board member, oversaw the establishment of the subsidiary, which should be on its own by the end of the year, according to Palm officials in Santa Clara, Calif.

“Splitting the two organizations up seems to make sense,” said Erich Berman, advanced technology consultant at Northwestern Mutual Life Insurance Co., in Milwaukee, and an eWeek Corporate Partner. “Their partners are more or less requiring it. They dont want the hardware people to have an advantage over other Palm OS licensees.”

Developers know that the split was made primarily with investors—not them—in mind. But a few said they remain hopeful the change will lead to innovative products.

“I did note that Nagel will continue to be a Palm board member. Will he have the ability to bring the fresh thinking necessary to expand and grow the soon-to-be-independent business unit or will he just see it as a captive shop for Palm?” asked Christopher Bell, an independent Palm OS developer in Belmont, Mass. “I havent heard a compelling argument for how Palm can effectively profit from the split businesses. If its only a split on an org chart, then its just costing money. They need to be able to do things differently [that] leverage their independence.”

Last month, Palm bought technology assets from open-source software provider Be Inc., of Menlo Park, Calif., whose operating systems are known for their multimedia capabilities. Around the same time, Alan Kessler, the former head of Palms software division, resigned from the company.

Nagel will join the company Sept. 17.

At AT&T, in Basking Ridge, N.J., Nagel was both CTO of the company and president of AT&T Labs. Prior to joining AT&T, he was senior vice president at Apple Computer Inc., leading worldwide research and development for Mac OS and hardware. He now joins a handful of other Palm executives who used to work at Apple.

“This is getting to be Apple II,” said Ken Dulaney, an analyst at Gartner Inc., in San Jose, Calif. “Maybe its an anti-Microsoft reunion tour. For Palm, [fighting Microsoft] is certainly a bigger challenge now than ever.”

Prior to joining Apple in 1988, Nagel was head of human factors at NASAs Ames Research Center.

In 1997, he was named to President Clintons first Advisory Committee on High-Performance Computing, Communication and the Next-Generation Internet. Now he serves on President Bushs Presidents Information Technology Advisory Committee.