Palm does Windows

The handheld maker looks beyond the Palm OS with its first-ever Windows-based smart phone. Photos: Palm's new Windows phone

SAN FRANCISCO--In an acknowledgment that the market for the Palm operating system has run out of steam, the maker of the popular Treo cell phone on Monday unveiled a version that runs Windows.

Microsoft Chairman Bill Gates joined Palm Chief Executive Ed Colligan and Verizon Wireless CEO Denny Strigl to demonstrate the device at a press event here. Although enthusiast sites have been calling the product the Treo 700w, Colligan said the company was not yet announcing the name and dubbed it simply "Treo for Windows."

The move unites two companies, Palm and Microsoft, that have been significant rivals in the market for software that powers handhelds and other mobile devices.

New Treo

"If you've been in this business long enough, you know that partners sometimes compete and competitors sometimes partner," Colligan said.

Palm has long said it would consider using an operating system other than the Palm OS. However, the company has not done so until now. Colligan said that Palm only wanted to make the move if it would help the company land new customers, which he said it will do.

Gates echoed the sentiment.

"I think a lot of mobile windows users will want to switch to this device," he said. "The big challenge will be keeping this product in stock."

Palm did not give out the full technical details of the device, declining to say, for example, how much memory it will have. The company did say the phone will have an Intel chip, run Windows Mobile 5.0 and be able to take advantage of push e-mail. With its color touch screen and QWERTY keyboard, the device is very similar in appearance to the existing Treos though it adds some Windows-specific buttons, such as an OK button that takes a user back to a previous screen.

A demonstration of the product included broadcast radio capabilities, photo-triggered speed dial and the ability to play back messages using VCR-like controls. Colligan said the device would also ship with an internal camera and a storage expansion slot for SD-cards. Access to Wi-Fi networks would only be available through the built-in SD card slot, Colligan said.

Although Palm and Microsoft showed off prototypes of the new Treo at Monday's event, the companies said that the product still needs to go through more testing before it is certified to run on Verizon's network, though that company's chief executive said the product is on a "fast track."

Verizon said the new Treo smart phone will be available to customers in early 2006. Colligan said that the company expects to have meaningful sales of the product for the fiscal quarter that ends in February, suggesting the launch will come shortly after Jan. 1.

Because it is based on an EV-DO platform, it will cost more than Verizon's current Treo 650 smart phones, which go for about $500.

While the new Treo will debut with Verizon Wireless' broadband service, with download speeds averaging 400 kilobits per second to 700kbps, other carriers are expected to climb aboard in mid-2006, Colligan said.

Colligan said Palm would not extend its hardware platform to other smart-phone operating systems such as Linux or Symbian.

"We are going to focus on what we have on the table," he said. "This is for customers who want that familiar Windows user experience. Certainly for Palm, we will reach into many more companies with these devices."

Palm did not discuss how it will use the Palm OS in conjunction with the new hardware it showed off Monday. But the company has said it plans to continue developing products, including smart phones, based on the Palm OS.

Palm for some time had been entertaining the notion of a Windows-based device to woo corporate customers who are accustomed to Microsoft products and have been reluctant to buy Palm OS-based gadgets.

"This is a major win for Microsoft if you realize that the company will power two very powerful smart phones--the Motorola Q and the Palm Treo," Jupiter Research analyst Michael Gartenberg said. "It is also a good thing for corporate IT departments, which can now leverage off of a common development platform while letting their users pick the handset that is right for them."

Palm, which once had the vast majority of the handheld market, has seen its share drop in recent years. Last November, Microsoft for the first time surpassed Palm in the number of handhelds shipped using its operating system, according to Gartner. Palm said it shipped 470,000 Treo units last quarter but it still runs behind the BlackBerry.

Palm in 2003 spun off its PalmSource unit, which makes software for mobile devices, but the standalone business faltered. Earlier this month, Japanese software maker Access said it would buy PalmSource for $324 million.

Verizon, also eager to drum up more corporate accounts, has been busy partnering with other PC makers and wireless access card companies to provide access to its EV-DO networks.

CNET's Ina Fried contributed to this report.

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