Palm this week hired Paul Mercer, a top Silicon Valley designer who helped in the creation of the iPod user interface. Mercer started working at Palm three weeks ago on a line of new products, but the company won't say anything more about what he is working on. Mercer brought two other designers to Palm from his design firm, Inventor. Hum... I wonder what Paul Mercer is working on?

If you guessed that Mercer is coming up with a new design for the Treo, then I agree with you. Palm knows it needs to upgrade the look and feel of the Treo, especially with the iPhone poised to take the handset market by storm.

Wireless industry insiders have complained to me many times that the Treo has lost its edge. The Treo is no longer the trend-setter it was a few years ago. For the same amount of money as a Treo (and in some cases for even less), you can buy a smart phone that does just as much in a smaller and hipper form factor.

Palm knows that if the Treo is going to survive in the era of the iPhone it has to evolve and become something new. What will Mercer come up with for Palm? We'll have to wait and see.