Thousands of developers -- and one supermodel -- will descend on the Santa Clara Convention Center as Palm hosts its annual developer conference beginning Monday. Claudia Schiffer will grace PalmSource to hype her soon-to-be-released Palm Vx Claudia Schiffer Edition, a version of the handheld computer sporting a blue brushed-metal case instead of the regular silver color. In addition to ogling Schiffer, developers at the weeklong conference will be there to learn where Palm is heading as it tries to evolve its line of handhelds from electronic organisers into more powerful devices that access wireless data and perform key business tasks. "Microsoft always asks 'Can Palm support enterprise applications?' The answer is hell yes and more," said Palm chief operating officer Alan Kessler. About 40 percent of the developers there will be focused on corporate applications, Kessler said. Palm chief executive Carl Yankowski concurred. "Easily half of PalmSource will be devoted to business," he said. While the business market is the current battleground for Palm and Microsoft, analysts say that wireless access in both the corporate and consumer markets is the killer application that will drive future growth. Shipments of handheld computers, including those based on the Palm and Microsoft Pocket PC operating systems, will grow an average of 28 percent per year through 2004, according to a report released this week by market researcher Cahners In-Stat Group. By then, more than half of all mobile devices will have some form of wireless capability, Cahners predicts. "Wireless data is the key feature driving this explosive market," Cahners analyst Robyn Bergeron said in the report. To handle wireless data, MP3s and eventually video, Palm will clearly need faster processors. Motorola has scheduled a press conference Monday to discuss the future of its Dragonball chip, the processor used in all of today's Palm and Handspring models. Sources say Motorola will outline a move to make the chip compatible with the ARM architecture, which is capable of giving the handhelds a considerable performance gain. Palm previously said it was looking to move to ARM-based chips. And earlier this week, Motorola announced a licensing deal with ARM that paves the way for Dragonball to incorporate the ARM architecture. Palm will also be showing off some of the new features it plans to put inside the next generation of Palm handhelds, including a demo of a Bluetooth-equipped unit. Bluetooth is a wireless technology that allows portable devices to exchange data when the gadgets are within 30 feet of each other. Today's Palms use a slower infrared connection that can beam data only to other Palm-based handhelds in close range. While Palm may appreciate a visit from Schiffer at the conference, perhaps less welcome will be Microsoft's presence. The software giant will host a nearby dinner and reception this week, looking to convince Palm developers to port their software over to Microsoft's Pocket PC. To prove its mettle, Palm plans to offer developers a hands-on comparison with several Pocket PC-based handhelds. Palm wants to show that its OS can achieve better performance at the tasks people actually perform with their handhelds. Palm still has the vast majority of the handheld market, but Microsoft has been asserting that devices based on its OS represent the future because it is capable of bringing the power of PCs to the handheld market. Although Microsoft is clearly going after the large corporate customers Yankowski said such companies do want to do business with Palm, as long as they are sure they can get the programs and support they need. Security is one area that will be increasingly important as Palm looks to move its products deeper into the business world. Several companies will release news next week related to that topic. NTRU plans to announce that it is moving its cryptography tools to the Palm operating system. Ontario, Canada-based Jawz plans to announce its DataGator software, which automatically encrypts all data on Palm handhelds. In addition, Palm may be closer to reaping the fruits of a June 1999 deal with Sun Microsystems to bring Java software to its handhelds. The underlying Java software is finished, and companies such as MapInfo have created Java software that runs on the Palm, said Curtis Sasaki, head of Sun's consumer technology group. Palm already has a large developer base, but adding Java support is another step toward making it easier for business applications that run on Palm handhelds. Palm recently held a two-day gathering in the California seaside resort of Carmel to meet with business customers. According to Yankowski, the customers told Palm: "Show us you can develop the solutions and we want to work with you." News.com's Stephen Shankland and ZDNN's Richard Shim contributed to this report Take me to the Mobile Technology Special Take me to ZDNet Enterprise Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read what others have said.