Palm To Develop Linux-Based Products

Smart phone maker Palm Inc. said Tuesday it will use a new platform based on Linux to help the company compete better.

Palm officials announced the new operating system platform during a meeting with analysts in New York, where they also discussed the company's business strategy and refused to talk about recent rumors of a possible buyout.

Palm has long used its cornerstone Palm operating system and last year broadened its customer base by debuting Treo smart phones based on Microsoft Corp.'s Windows Mobile system.

The upcoming Linux-based platform, which Palm had been developing quietly for several years, will join the product mix as "a new foundation," Palm Chief Executive Ed Colligan said.

He said the platform will take the Palm software and "modernize" it.

The Sunnyvale-based company doesn't own the Palm OS and spent $44 million last year for a permanent license to use it.

Although the Palm OS had set an industry standard for ease of use in handheld computing years ago and attracted millions of Palm devotees, some industry analysts have criticized the aging platform as lacking in significant improvements, especially in handling multimedia applications.

Colligan did not give specific product details but said the Linux platform, which will give the company control again over its own operating system, will help the company lower costs and reduce the time spent to bring products to market. He said Palm will introduce Linux-based products later this year.

The Linux platform is part of the company's new strategy to deliver multiple reference designs -- rather than a single product design -- to its manufacturers and carrier partners, allowing them to more quickly introduce customizable products with more varied designs, features and pricing.

The changes come as the Treo maker faces intensifying smart-phone competition from deep-pocketed rivals, such as Nokia Corp., Motorola Inc. and Samsung Electronics Co., which churn out dozens of new cell phone models each year.

Smart phones -- handsets that combine cell phones with e-mail, Web browsing and other multimedia capabilities -- are moving into the mass market, Colligan said.

"We think there is a big wave coming in this whole mobile computing revolution," he said, using a surfing analogy, "and we're lining ourselves up."

Speculation of Palm getting acquired by either a larger gadget maker or a private equity firm has circled on Wall Street over the past few months.

Shares of Palm fell 27 cents to close at $16.91 on the Nasdaq Stock Market.


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