Analysts said they believe PalmOne support for a Microsoft OS could help PalmOne sell more devices to large businesses, many of which use Microsoft software. The business market is seen as a key growth area for the most capable of mobile devices -- phones and handhelds that can access information stored on a corporate network.
Former Palm rival Handspring had been laying plans for a device with Microsoft's OS prior to Handspring's acquisition by Palm in late 2003, Blair said. The newly formed PalmOne has been reaching out to Microsoft as well. The two companies have inked a deal that lets the latest Treo, the Treo 650, connect directly to Microsoft's Exchange servers. In addition, PalmOne earlier this year released a keyboard that works with devices that run Microsoft's Windows Mobile OS.
Blair said the two companies are going further and that he believes PalmOne will release a Treo using a Microsoft OS sometime next year.
"I think it is something that PalmOne needs to do," he said.
PalmOne has long maintained it is not solely committed to the Palm OS, but the company has been mum on any specific activities.
Marlene Somsak, vice president of corporate communications at PalmOne, said the company is "open to evaluating other operating systems if doing so would grow the market or otherwise meet customers' needs."
However, Somsak would not say what actions PalmOne has taken in the past or discuss future plans.
Since the split, PalmOne has seen its sales of smartphones grow, thanks to the popularity of its Treo 600. However, PalmSource has felt the pain as some key hardware partners have scaled back their use of the Palm operating system. Sony recently said it would pull back its handheld efforts, getting out of US and European markets but continuing to sell devices in Japan. Sony was at one time the second-largest maker of Palm OS-based devices.
PalmSource also faces stiff competition from the likes of cell phone giants such as Nokia, which is backing the Symbian OS for smart phones, and, obviously, Microsoft with its Pocket PC Phone Edition and Smartphone operating systems.
Shipments of handhelds, PalmSource's core market, have been sliding over the last few quarters. About 2.1 million units shipped in the third quarter, down 4.6 percent compared with the second quarter, and down 8.7 percent compared with the third quarter of last year, according to IDC.
