Sounding off in a barrage of research notes today, analysts suggested Palm investors view the transition in leadership as a positive. “The timing was certainly awkward, coming just four days after the launch of the Pre,” Thomas Weisel Partners analyst Matthew Sheerin said in a note to investors. “Our take is that Rubinstein was being groomed for the last two years to run the company, and is ready for the next challenge, having put together a solid engineering team.”

James Faucette of Pacific Crest agreed. “Our turnaround thesis on Palm has always been rooted in the development team that Palm had recently put together, particularly the addition of Jon Rubinstein as head of development,” he said. “Today’s announcement effectively ensures that one of Silicon Valley’s best talents not only remains with Palm, but is fully engaged with the company’s future.”

And Global Equities Research analyst Trip Chowdhry said the streamlining of senior management roles at Palm was an absolute necessity. “I think this is the right move, a smart move,” he told the Mercury News. “[Rubinstein’s] involvement in the company has to be more mainstream. He has to be responsible for the success, and accountable for the failure, if there is any.”

Palm shares were up nearly eight percent, to $12.94 at the time of this writing. That’s up more than 500 percent since last December.

“We believe demand has deteriorated across most of the company’s core end-markets, with a particularly sharp slowdown in handsets, evidenced by a number of key supplier and competitor pre-announcements,” Sheerin wrote in a note to clients. “[The economic downturn] will make a recovery in the core handset business even more challenging and could accelerate cash burn.”

More ugly news for Motorola (MOT), which last week had its credit rating slashed to Junk by Standard & Poor’s.

“We believe demand has deteriorated across most of the company’s core end-markets, with a particularly sharp slowdown in handsets, evidenced by a number of key supplier and competitor pre-announcements,” Sheerin wrote in a note to clients. “[The economic downturn] will make a recovery in the core handset business even more challenging and could accelerate cash burn.”

More ugly news for Motorola (MOT), which last week had its credit rating slashed to Junk by Standard & Poor’s.