Palm, Microsoft target businesses with new Treo

The new Treo smart phone running Windows Mobile 5.0 will help both Palm Inc. and Microsoft Corp. persuade more enterprises to purchase mobile devices for their employees, top executives from both companies said Monday.

At a press conference in San Francisco, Palm President and Chief Executive Officer Ed Colligan and Microsoft Chairman and Chief Software Architect Bill Gates said the relationship between the Windows Mobile OS (operating system) and applications running on the desktop version of Windows will give business users a more compelling reason to use Treos in the workplace.

“This will help us reach into the many enterprises that have standardized on the Windows platform,” Colligan said. He said point blank that Palm has no plans to run any other operating systems on the Treo besides Windows Mobile and the existing Palm OS that powers the current Treo 600 and 650 models on the market.

“We don’t need another operating system,” Colligan said. “We felt like we could build new functionality with this partnership, that we could reach some new customers. We thought this was a company that could make a difference for us.”

The deal with Palm also fits nicely with Microsoft’s long-term vision of making its Windows Mobile platform as ubiquitous in the enterprise as the desktop version of Windows. “In our view, every professional will [eventually] have a phone that hooks up to their network,” Gates said Monday.

Most notably, once the new Treo is available early next year, it will allow business users accessing e-mail from Microsoft Exchange Server 2003 to use e-mail push technology to synchronize information from Microsoft Outlook without the use of another piece of software to enable the connection, Gates said.

The e-mail push technology is expected to be available in an update to Windows Mobile 5.0 by the end of the year.

Gates said that out of the 130 million current Exchange users, about 50 million have devices that can hook up to Exchange, and about half of that number are using Research In Motion Ltd.’s Blackberry devices, which require the use of a third-party server to allow synchronization to Outlook.

The new Treo running Windows Mobile will give business users a seamless experience allowing them not only to access information through Exchange, but also to use click-to-talk and other features specific to the new device that will enhance their productivity, he said.

The partnership that developed the new Windows Treo also can be seen as “a joint engineering relationship” between Microsoft and Palm that will have an impact on future versions of the Windows Mobile OS, Gates said.

Windows Mobile 6.0 and forthcoming versions will leverage technology developed through the Treo Windows smart phone project, he said.

This kind of close relationship between Microsoft and Palm, once fierce rivals in the mobile OS space, leaves the fate of the Palm OS in question.

While Colligan said that Palm will continue to develop Treos that run the Palm OS, he did acknowledge there will be some “cannibalization” of the current Treo 650, which runs Palm OS.

However, he stressed that the deal with Microsoft can be seen as an “expansion” of Palm’s smart phone strategy, not any indication that it plans to pull Palm OS-powered Treos from the market.

Still, Palm’s mobile device business appears to have been distancing itself from the Palm OS for some time. About two years ago, Palm split into two companies — Palm Inc. for developing hardware devices and PalmSource Inc. for developing the Palm OS and other software.

Earlier this month, Access Co. Ltd., a Tokyo-based developer of embedded Web browsers for cell phones and other devices, agreed to acquire PalmSource, further raising doubts about the fate of Palm OS’ deployment on devices from its original parent company.

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