UPDATED In what could be considered a huge win for Microsoft and the Windows Mobile platform, former rival Palm announced Monday a new version of its Treo smartphone running the Redmond company's operating system for mobile devices.
Although not yet named, the new Treo will be carried exclusively by Verizon Wireless when it debuts in early 2006. Palm president and CEO Ed Colligan said Verizon would have exclusive access to the phone at least through the middle of next year.
Rumors have swirled in the media regarding a possible Windows-based Palm device for several months. Both Palm and Microsoft had refused to comment on any negotiations. However, Colligan admitted this was nothing new.
"We've been working on this for a number of years," Colligan told attendees at a press conference in San Francisco. "It was probably the worst kept secret."
Not many specifications were offered about the new Treo other than the fact it would run Windows Mobile 5.0, include an Intel processor, and support for Verizon's high-speed EV-DO network. Sources also claim the device will include Bluetooth and 64MB of built-in memory.
The price has not yet been decided, although Colligan said to expect it to be higher than currently available models.
Microsoft Chairman Bill Gates seemed to admit that Palm did have the upper hand in innovation for the mobile platform for quite awhile. "Palm always did great work. We lusted after the things they did well," Gates told the audience.
But while Palm has surged to life, the death knell has sounded for Palm OS after Japan-based Access purchased PalmSource and the rights to the Palm OS on September 9 for $324.3 million.
PalmSource had struggled since it was spun off by Palm in 2003. As PDA sales began to slow, Palm licensees shut down in favor of focusing on other businesses. Sony, one of Palm's biggest independent licensees, stopped selling handhelds last year.
Analysts called the deal with Palm a huge win for Microsoft. In August, Jupiter Research analyst Michael Gartenberg spoke of the possibility. "It bodes very well for Microsoft, the same company that was often derided by Palm's Jeff Hawkins for their mediocre work in mobile technology," he said.
"This event, if it actually happens, would mark a powerful turning point for Microsoft, more from a psychological perspective than a market share perspective, but that's the key to getting momentum going for the longer haul," Gartenberg added.
The Treo is one of Palm's best selling products; last quarter, the company shipped a half-million devices.