Palm Flounders

Smartphone and PDA maker Palm is not operating on all cylinders like its new CEO Jon Rubenstein was accustomed to when he was at Apple. This week the company said it was restructuring and cutting 10% of its workforce. Many of the terminations are expected to be executive types that will be replaced by engineers.

Among the company’s woes:

– Apple’s iPhone and a number of iPhone “wannabes” have gobbled up the PDA market.

– Palm says it will lose money in the current quarter.

– The Linux-based replacement for its five-year-old operating system – Palm OS 5 Garnet – probably won’t be finished until 2009.

– The company’s planned Foleo “smartphone companion” was canceled.

– Warranty costs on its new Centro and 500v smartphone for consumers has been higher than expected.

– Its share price is down some 70% over the last year.

Other than that, everything’s fine. Roger McNamee, who joined Palm’s board of directors with Rubenstein, sees clear skies ahead. “You won’t even see it in the numbers for awhile, but the company is off to a great start,” he said.