The board of directors at handheld device manufacturer palmOne made Ed Colligan's tenure as CEO permanent yesterday. At the same time, Pocket PC giant Hewlett-Packard surprised Wall Street in Mark Hurd's first quarter as CEO with better than expected results.

PalmOne's Colligan had served as president of the Milpitas, Calif., company since June 2004 before he was named interim CEO following the resignation of Todd Bradley, palmOne's first CEO after the company split its hardware and software operations in October 2003.

Ed Colligan Source: palmOne

Eric Benhamou, palmOne chairman of the board, said directors conducted a comprehensive search for external candidates to fill the CEO role before deciding to keep the one already in place.

"Ed has been a driving force for innovation in mobile computing," he said in a statement. "Ed has secured the confidence of the board, our customers, suppliers and employees, and we believe we have chosen the right leader for palmOne."

Officials were not available at press time for comment on who would step into Colligan's shoes as president.

The Palm PDA (define) enjoys a strong market position compared to its competitors, and is expected to retain its second-place position in the marketplace in the first quarter of 2005, according to recent statistics by research firm Gartner.

Gartner, however, reported the company saw a slump in worldwide sales of PDA units, mostly at the expense of competitor Canadian-based RIM (Quote, Chart).

According to its estimates, palmOne shipments dropped 26.3 percent from the first quarter of 2004 to the first quarter of 2005, from 834,591 to 614,750. RIM, on the other hand, saw unit sales increase 75.6 percent, from 405,000 to 711,000 in the same timeframe. Researchers said palmOne's market share, 18 percent, is the lowest the company has been at since it entered the market in 1996.

"PalmOne has an excellent opportunity to become the world's most significant mobile computing company, and I am honored and thrilled to be chosen to lead it," Colligan said in a statement Monday. "The industry is young and full of promise, and I'm confident we have the products, partners and talent to extend our leadership."

Hewlett-Packard
Even with HP's succesful first quarter, Hurd said the company's results still leave much to be desired - and said the company will soon announce plans to do just that.

"HP had a solid quarter," Hurd said in a statement. "Nevertheless, our overall performance leaves room for improvement in many of our businesses. We expect to provide details as soon as our plans are finalized that will move us toward that objective."

HP reported April quarter earnings of 37 cents a share, a penny better than expected, and revenues rose 7% to $21.6 billion. The company said it expects July quarter earnings of 29-31 cents a share - below forecasts - but revenue guidance of $20.3-$20.7 billion was in-line to above expectations.

Server and services sales drove the company’s growth. Storage sales declined 6%, and personal systems and printers and imaging grew in the mid-single digits.

Although HP is the bestselling Pocket PC vendor by a mile, it placed fifth—behind Nokia, palmOne, Research In Motion, and Fujitsu (the chief supplier of smartphones to Japanese mobile operator leader NTT DoCoMo)—overall smart device Vendor (PDAs & smartphones)last quarter, according to market research firm Canalys.

Even though the computer and printing giant increased shipments year-over-year by 5 percent (577,650 to 607,010), its market share dropped from 9.7 percent for first quarter 2004 to 5.6 percent for first quarter 2005.

The company's disappointing finish is most likely due to three factors: amazing growth on the part of RIM and Fujitsu, the majority of HP's eggs still residing in the PDA basket, plus disappointing sales for its first smartphone, the iPAQ h6315.

HP's handheld fortunes could change soon with new GSM versions of the iPAQ h6300 series Pocket PC Phone reportedly coming to Cingular Wireless, the largest wireless carrier in the U.S., soon and the expected release of its highly anticipated hw6500 and hw6700 iPAQ Mobile Messengers later this year.

Hurd sounded an upbeat note on the conference call, saying the company's brand name, customer loyalty and employees "give me great hope."

Shares of HP climbed 4% in after hours trading