PalmOne CEO Todd Bradley is stepping down, making way for current company president and former Handspring CEO Ed Colligan.

Bradley will resign in February but shall remain with the company until May, the company confirmed. He became CEO in October 2003 when PalmOne spun off PalmSource, which develops the Palm OS, and acquired Handspring. Ed Colligan, currently PalmOne's president and formerly president and chief operating officer at Handspring, will become the interim CEO while PalmOne's board of directors searches for a replacement for Bradley.

Changing the mission

PalmOne virtually invented the PDA (personal digital assistant), but has steadily lost market share to companies like HP in recent quarters as the entire PDA market declines. However, the company has a hit with the Treo smart phone products, originally developed by Handspring. Bradley was credited as a force behind the Handspring acquisition by Eric Benhamou, PalmOne's chairman.

The company's board of directors plans to take some time to evaluate potential external candidates, as well as Colligan, for the CEO position, said Marlene Somsak, a PalmOne spokeswoman. However, they realize that the decision should be made as quickly as possible, she said.

Analysts predict that stand-alone PDAs will eventually die out in favor of voice-enabled handheld devices like the Treo 650 and HP's iPaq h6315. PalmOne expects most of its future growth to come from the Treo family of products as well as PDAs with wireless Internet connectivity.

Gone fishing

Bradley is leaving to pursue other challenges, he said in a release. He will remain as CEO until February 25, when PalmOne's third fiscal quarter ends, and will advise the company on its management transition until the end of its fiscal year in May.

Bradley joined PalmOne as head of the company's hardware business in June 2001 after leaving Gateway, where he held numerous positions in sales and management.

PalmOne's business is changing significantly with the success of the Treo products, said Sam Bhavnani, an analyst with Current Analysis. The company must now move its primary products through wireless carriers, who present a very different business model than retail stores or direct online sales, he said.

"Those are some of the hardest things to do, to go from a traditional hardware retail model to carriers, where the carriers want to control the show," Bhavnani said.

Innovation station

Bradley made his decision to leave over the December holidays but has not disclosed his next destination, Somsak said. He had been talking with the board of directors for some time about his potential departure, she said.

Colligan will be considered for the permanent CEO position, PalmOne said. He has a great deal of experience with Palm, dating back to the early days of the company and some of its pioneering PDAs.

Colligan left to found Handspring with product designers Jeff Hawkins and Donna Dubinsky and has the experience with converged smart phone devices that will make him one of the primary candidates for the permanent CEO position, Bhavnani said.