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Windows-powered Palm Treo set to ring

Verizon Wireless will be the first carrier for Palm smart phone featuring Microsoft software.

Palm is reportedly getting ready to launch a handheld that runs on software from rival Microsoft.

Microsoft Chairman Bill Gates is scheduled to join Palm CEO Ed Colligan and Verizon Wireless President and CEO Denny Strigl for a press event in San Francisco on Monday.

Representatives with Microsoft, Palm and Verizon declined to comment on the news, but the joint appearance of the three men is pointing to the long-anticipated arrival of the first Palm Treo smart phone based on the Windows 5 mobile operating system.

In its earnings report Thursday, Palm said it shipped 470,000 Treo units for the quarter, an increase of more than 160 percent from the same time last year.

Palm has for some time 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.

Several reports and photographs of a device known as the Treo 700w have been circulating on fan sites and community forums. The letter W, according to some, signifies that the smart phone is Windows-based.

"The big deal is that it will help Palm significantly in the enterprise space, a segment they have often gone after but have never totally been able to solve," Sam Bhavnani, an analyst with research firm Current Analysis, said.

Verizon is also a significant piece of the puzzle, Bhavnani said, as the carrier is working to increase its corporate sales.

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.

In a report out earlier this month, Gartner showed the Palm OS running on just 19 percent of handhelds, compared with 46 percent of devices running Windows Mobile and 23 percent running Research In Motion's software. Gartner's figures include handhelds and wireless devices like the traditional BlackBerry, but exclude smart phones, including the Treo.

Palm has already taken some steps to move itself closer to Windows. Last October, the company inked a deal with Microsoft to allow Palm OS-based Treos to connect directly to Microsoft Exchange 2003 e-mail servers. That feature is standard on the current Treo 650.

"As corporations make large-volume purchases, Palm is in good position with this Windows-based device because of the longstanding feeling of compatibility between branded devices," Bhavnani said. "For example, Microsoft desktop OS and Microsoft Outlook will work better with Windows Mobile than with Palm OS."

In a recent interview with CNET, Palm Chief Financial Officer Andrew Brown noted that Palm was tinkering with the possibility of a Palm hardware device that ran something other than Palm OS. "CIOs don't get fired for using Microsoft products," he said.

The news is expected to come a day before the Sept. 27 start of the CTIA wireless trade show, a traditional venue for Palm to announce new products, Bhavnani said.