Palm hires Ex-Apple engineer to Counter iPhone Threat

Palm Inc. has reportedly engaged the services of former Apple software developer Paul Mercer to develop a line of new products, a move that the company hopes would help maintain its pioneering position in increasingly competitive smartphone market.

According to a report published in Wall Street Journal on Friday, Palm Inc. has hired Paul Mercer, a veteran Apple Macintosh software designer who also helped develop Apple Inc.'s revolutionary iPod.

The top Silicon Valley software designer has joined the Sunnyvale-based maker of hand-held computers along with the two employees from Palo Alto-based Iventor Inc., the independent design firm that he founded in 2000 and headed in Palo Alto, California.

Mercer has been working at Palm for 3 weeks on a new range of products, said the spokeswoman, Marlene Somsak, however, she declined to comment further on the project.

Paul Mercer, 39, joined Apple in 1987 and served as an Apple engineer during the late 1980s and early 1990s, working on a variety of products. He helped creating the original iPod operating system for Apple, and was also responsible for the creation for the System 7 version of the Macintosh Finder. He also worked on the Newton, Apple's ill-fated effort at creating a personal digital assistant device.

Mercer left Apple in 1996 to start Pixo Inc., a software firm that created a system used by Apple software designers to create the first version of the iPod interface. Pixo which according to Mercer had grown too large to maintain its focus was ultimately bought by Sun Microsystems Inc. in 2003. Founded to create software for hand-held devices, Pixo grew to more than 100 software developers during the dot-com boom years, he said.

Despite being the company the pioneered the handheld computer space Palm has been facing immense pressure from companies like Microsoft, Sony Ericsson, Nokia, Motorola and now Apple, which have been increasingly developing all sorts of convergence devices, whereas Palm has lagged behind as at this point it has the Treo and that's about it.

Palm, the manufacturers of the Treo range of smartphones, has found itself under pressure mainly by Apple's much-anticipated iPhone, an all-in-one cell phone/iPod/pocket computer which the iPod/Mac maker plans to launch in June.

Apple’s iPhone has already shaken up the cellphone industry by its flexible interface, giving a tough challenge to handset makers including Palm, which makes the hybrid phone-organizers, called smart phones.

LG’s first completely touch-screen mobile phone, KE850, which the South Korean consumer electronics maker launched in January in association with PRADA, one of the world’s leading brands in the luxury goods industry, offers some similarities to the Cupertino, California based Apple Inc.’s recently launched iPhone.

The industry analysts say that the Apple’s revolutionary iPhone that combines three products-a revolutionary mobile phone, a widescreen iPod with touch controls, and a breakthrough Internet communications device with desktop-class email, web browsing, searching and maps-into one small and lightweight hand-held device, will force the industry to shift its focus from hardware to software design.

Meanwhile, Mercer's arrival at Palm comes amid speculation that Palm will be acquired by one of its rivals and it has reportedly hired an investment bank to help it weigh its options.

Most recently, Mercer as an independent designer helped design Samsung's Z5 MOP3 player, an MP3 player that has only been sold in South Korea. “He’s the best of the best in this space,” said Paul Saffo, an adviser to Samsung and a Silicon Valley forecaster. “The guy has a knack for designing complex systems in ways that are accessible.”

Samsung's newest Z5 portable MP3 player has hit the market on March 5.