With tanking stock and market share waning, Palm is hoping a new operating system will help it mount a comeback.
Palm will reportedly unveil its new operating system and the mobile handsets that will use it at next month's Consumer Electronics Show, sources close to the company said.
The OS, code-named Nova, has been in the works for nearly four years, and it has gone through many iterations, according to a report in BusinessWeek Monday. Jon Rubinstein, who came to from Apple to lead Palm's comeback, has said the new internally developed OS will be focused on the mobile Internet.
"The next 10 years is all about the transition from notebooks to mobile computing," Rubinstein told BusinessWeek.
To help prepare Nova, the company said it hired more than 150 engineers since Rubinstein's arrival in mid-2007. The company said it probably could not regain the No. 1 U.S. smartphone spot it once had, but it thinks it could survive and thrive as a niche player with 2% of the growing market.
It is unclear whether the Nova will be based on the current Palm OS (Cobalt 6.1) or if it will be a complete overhaul of its software. In 2005, Palm extended an olive branch to Microsoft that allowed it to license the Windows Mobile operating system to power some of its Treo smartphones.
In addition to the software, no details have emerged on the handsets that would run Nova, but the company has turned to HTC for recent smartphones like the Palm Touch Pro, and its devices historically have been well-designed. Palm also has a large ecosystem of applications, good relationships with wireless carriers, and a dedicated fan base.
Handsets like Research In Motion's BlackBerry and Apple's iPhone already take advantage of mobile Internet connections, but Palm said these two cater to either the business user or those interested in a strong mobile media experience. It's the "fat middle of the market" that Palm is hoping to attract with its Nova devices, Palm said.
Palm is facing multiple challenges if it hopes to be a significant player in smartphones again. Despite the fast-selling Centro smartphone, the company has posted five straight quarterly losses. The competition is also increasing, as Apple, RIM, Symbian, and Microsoft's Windows Mobile will continue to slug it out in the high-end smartphone market. But Palm may find its most direct competitor will be Google's Android OS, which is going for the same middle of the market, and has already been chosen as the platform of choice by Motorola.
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