SAN FRANCISCO-One of the device market’s worst-kept secrets was let out of the bag last week as Palm Inc. announced plans to launch a Microsoft Corp. Windows Mobile operating system version of its popular Treo smart phone. The device, which so far has not been given an official number, will be exclusive to Verizon Wireless when it launches early next year and will include support for the carrier’s CDMA2000 1x EV-DO network.
Rumors of the Windows Mobile-powered Treo surfaced in August, fueled by pictures of a device that swirled around various Internet sites.
Despite the official announcement, details of the device still are scarce. The device uses the same form factor as the current PalmSource Inc.-powered Treo smart phones-including the small keyboard and camera on the back-with Palm admitting only the Windows-based device will include an Intel Corp. processor and an EV-DO radio chipset.
Palm and Verizon Wireless also would not comment on a possible price for the device, though Verizon Wireless sells the current Treo 650 smart phone that uses the PalmSource operating system and is compatible with its slower-speed 1x network for $400.
In addition to strengthening Palm’s device platform, the Windows Mobile 5.0 device brings together one-time bitter rivals. The detente was helped by Palm’s spinoff of its operating system business two years ago as PalmSource, though it continued to offer only PalmSource OS devices until Monday’s announcement.
“We have competed in the past, and sometimes vigorously, but things have changed, and we are no longer in the underlying [operating systems] business anymore,” explained Palm President and Chief Executive Officer Ed Colligan. “Partners sometimes compete, and competitors sometime partner.”
Colligan also said that it would continue to support the PalmSource OS in its devices, but that the company was not looking to bring on any additional operating systems in the near future. Palm has a licensing agreement with PalmSource that runs through the end of the decade.
“This is not about other things going away, but about growth,” Colligan said.
The alliance also is a strong boost for Microsoft’s floundering smart-phone operations. Though the company’s mobile platform division reportedly continues to lose money, the software giant has scored several licensing agreements with big-name device manufacturers like Motorola Inc., Samsung Electronics Co. Ltd. and High Tech Computer Corp.
While several devices currently are targeting the mobile enterprise market-including the near-ubiquitous Research In Motion Ltd. Blackberry and various Treo models-Microsoft Chairman and Chief Software Architect Bill Gates said he thought there was room for growth.
“This is a high-growth market,” Gates said. “Everyone will have a phone that hooks up to their e-mail. It’s not a well-penetrated market.”
Gates added that the new Treo device also will include e-mail push capabilities launched with the Windows Mobile 5.0 platform, which should help it compete against its rivals.
Microsoft’s founder also praised Palm’s former operating system subsidiary, noting Microsoft tried to emulate many of the Palm OS user-interface approaches. Those features include a smart dial that allows users to link photos to contact lists and an ignore call option that allows users to respond to calls with text messages.
“Palm always did great work,” Gates said. “We have lusted after some of the things they did very well.”
The device will not, however, support Verizon Wireless’ consumer-oriented VCast service that allows users to download handset-specific content.
The deal reinforces Verizon Wireless’ influence in the market. While the carrier has been eclipsed by Cingular Wireless L.L.C. in terms of total subscribers, Verizon Wireless has been posting stronger quarterly growth results and has managed to leverage the strength of its EV-DO launch that now covers more than 60 markets and nearly half of the nation’s population.
Gates noted that Verizon Wireless has sold more Windows Mobile devices than any other carrier in the United States, while Colligan said the carrier was a main driver for the device.
Strigl said the Windows Mobile 5.0 device will be the “gold star product and center piece of our line-up,” but added that the carrier will continue to carry the current PalmSource-powered Treo 600 and Treo 650 devices.
“We will continue to carry both,” Strigl said.
Sprint Nextel Corp. managed to gain a limited exclusivity on the Treo 650 devices when it launched last year, though the device now is available to both Verizon Wireless and Cingular. Colligan said it planned to make the device available to other carriers beginning in the second half of next year and that a GSM-based device is in the works.
