But will it be enough?
That's the big question that Wall Street investors and gadget gurus will be looking at over the next 18 to 24 months.
On Monday, Palm said it. Elevation Partners was founded by , and Roger McNamee, who will now sit on Palm's board, replacing Eric Benhamou and D. Scott Mercer. The company also said it would bring on Jon Rubinstein, who formerly ran the iPod division at Apple, as executive chairman of the board.
The deal comes as Palm, which essentially invented the smart phone category with its popular Treo product, tries to regain its position as a leader in an increasingly crowded market. Over the past couple of years, everyone and their brother--from BlackBerry maker Research In Motion to the big handset makers Motorola, Nokia and Samsung--have been introducing so-called smart phones that combine phone functionality with e-mail and Web surfing capability, competing directly against the Treo.
And now, which is already generating unprecedented buzz, is only weeks away from launch on AT&T's network.
Meanwhile,in terms of new features and functionality. In recent months, rumors have floated around Wall Street that the company might be ripe for a takeover, with bigger players such as Motorola and Nokia mentioned as potential suitors.
In the middle of this ultracompetitive market, Palm introduced its latest product, a miniature Linux-based laptop dubbed the Foleo, which has left many experts scratching their heads. The 2.5-pound keyboard and computing device, which is designed to attach to a Treo so people can type more easily, was announced last week, but so far has gotten a lackluster reception.
"The company has been under tremendous pressure to do something," said Tavis McCourt, a managing director at Morgan Keegan & Company. "The company has missed a product cycle, and it's good to change things around to signal to investors that something new is coming."
The Rubinstein effect
The equity investment from Elevation Partners should appease frustrated investors in the short term by helping pay for the one time $9 dollar per share dividend Palm will pay out as part of this arrangement. But the deal will also have longer term strategic benefits. Specifically, the addition of Fred Anderson, Roger McNamee, and Jon Rubinstein should help the company fine-tune its vision and execute more effectively moving forward.
Palm President and CEO Ed Colligan told investors during a conference call Monday that Jon Rubinstein will lead the company's product development. Anderson and McNamee will not likely be involved in day-to-day operations of the company, but their presence on the board will help the company forge new relationships, as well as help ensure a source of future investment capital.
"We think this transaction will reinvigorate our management team and help us attract new talent," Colligan said. "John will focus on helping us turn our product engine. He'll take a leading role in the development of the product organization."
Rubinstein, who helped turn Apple around in the late 1990s by leading development of the iMac and the iPod, appears to be well-suited for the job. He's known throughout the industry as someone who can take a vision and execute on it by building successful products, an approach many believe Palm needs right now. McNamee said he believes Rubinstein's strong execution history will fit well with Palm's founder Jeff Hawkins.
"We are intensely attracted to the idea of teaming Jon with Jeff Hawkins," he said. "We feel like that is a team that can't be beat."
But analysts say Rubinstein's presence on the management team doesn't necessarily mean a slam dunk for Palm.
"Rubinstein is a good addition for them," said Charles Golvin, an analyst with Forrester Research. "And there is a lot of potential for success. But the cell phone market is not the MP3 market. Palm is not creating a new category. It needs to evolve the market. So there are a whole set of other challenges associated with that."