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What If Palm Agreed To Apple's No Poaching Plea?

Apple CEO's Steve Jobs suggestion that Palm and Apple not poach each others' employees would've left Palm a few executives short if former Palm CEO Ed Colligan had agreed.

In August 2007, Apple's man in black and Colligan reportedly had several exchanges and communications discussing a possible no-poaching agreement. Colligan ultimately declined to play along, calling Jobs' immodest proposal both wrong and possibly illegal.

Jobs' attempt at a gentleman's agreement is another illustration of Apple's highly competitive nature. The communications and exchanges between the two executives were brought to light by a Bloomberg report this week. Bloomberg obtained access to the back and forth between Jobs and Colligan.

Even though Colligan opted against a no-poaching clause, it still raises questions around what could have happened.

The simple answer is: Palm would be short two key executives -- three if current Palm CEO Jon Rubinstein is included -- and a few other strategic team members.

Jobs' suggestion of Apple and Palm not picking from each others' workforces was already too late to stop Rubinstein from defecting. Rubinstein, a 15-year Apple veteran credited with being the father of the Apple iPod, joined Palm in June 2007 and was appointed CEO when Colligan stepped down earlier this year.

Still, if Apple put stronger noncompetitive poaching pressure on Palm, Rubinstein may not have been able to spearhead the creation of the Palm Pre and Palm's new webOS, its rival for the Apple iPhone that has the two companies battling in a smartphone royal rumble. But a no-poaching agreement could have prevented Palm and Rubinstein from wooing away other Apple workers and contractors.

Earlier this month, Apple designer Jeff Zwerner joined Palm as an executive. Zwerner had two stints at Apple. During one, he was a creative director for packaging from 2001 to 2003. Most of Zwerner's experience with Apple, however, was with an agency that Apple commissioned for design work. Still, an agreement between Colligan and Jobs may have resulted in Rubinstein not tapping Zwerner as Palm's new head of brand design.

Rubinstein and Zwerner are two of three members of Palm's management team with Apple experience and ties. The third is Mike Bell, Palm's senior vice president of product development, quietly hired by Palm in January 2008. According to Bell's bio on the Palm Web site, he was vice president of CPU software in Apple's Mac Hardware Division. Bell worked 16 years at Apple, leading product development and other efforts for Cupertino, Calif.-based Apple.

Reports at the time indicated that Jobs was infuriated over Palm poaching Bell, so much so that Palm didn't announce his hiring publicly until long after he had joined Sunnyvale, Calif.-based Palm.

Then, in May 2008, Lynn Fox, former head of Mac PR for Apple, joined Palm's PR team as vice president of public relations. Rubinstein also is suspected of bringing aboard a host of Apple engineers in the two years he's been with Palm.

While Jobs' suggestion for the two companies not to go after each others' employees preceded much of Palm's Apple picking, if Colligan agreed, it could have prevented some of the defection.

Had Colligan agreed, it also could have settled down the heated rivalry between the two companies, which has resulted in Apple threatening lawsuits and making every attempt to take swipes at the Palm Pre, which Jobs threatened in the two executives' communications when Colligan refused to comply. Bloomberg reported that Jobs was quick to highlight that Apple has a number of patents and a vast sum of money that could prove useful if Palm and Apple were to engage in a legal battle.

In a January earnings call, Apple's acting CEO Tim Cook responded sharply to an analyst's questions about similarities between the iPhone and the Palm Pre, making veiled threats of legal action against any company that mimicked the iPhone's technology in any way.

"We like competition, as long as they don't rip off our IP [intellectual property], and if they do, we're going to go after anybody that does," Cook said on the call. "We will not stand for having our IP ripped off and we'll use whatever weapons we have at our disposal [to prevent that from happening]."

Apple also has managed to slap back at the Palm Pre by blocking the smartphone's access to Apple iTunes. The Palm Pre featured the ability to trick iTunes into thinking it was an iPod, but a recent iTunes update blocked the Palm Pre and any other non-Apple device from syncing with the popular music software.

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