Palm introduces operating system

Palm Inc. will introduce today a beta version of its new operating system, which includes 128-bit security, support for wireless, including the Wi-Fi wireless LAN standard and Bluetooth short-range systems, and multimedia hooks that will support development of larger screens.

Palm OS 5, which Santa Clara, Calif.-based Palm and its new Palm OS subsidiary, PalmSource Inc., will preview today at a developers conference in San Jose, will also provide hardware manufacturers with the ability to build products that can record sound and play CD-quality digital audio.

Unlike the older operating system, Palm OS 5 has built-in support for Bedford, Mass.-based RSA Security Inc.'s RC4 encryption algorithm, not a third-party add-on. The built-in support for wireless is also integral to the new operating system.

The security is designed to encrypt and protect valuable enterprise data on the device, which Palm views as essential for a product that users frequently lose. Users also want devices that provide easy, nonkludgy connections to wireless services, which the new operating system was designed to provide.

Palm OS 5 was designed to run on the ARM family of chips developed by ARM Ltd. in Cambridge, England. ARM chips are licensed by Intel Corp., Schaumburg, Ill.-based Motorola Inc. and Dallas-based Texas Instruments Inc. (see story).

Michael Mace, chief competitive officer at PalmSource, said tailoring the new operating system to run on ARM chips provides Palm and its software licensees with the ability to develop integrated handheld computing products that can also operate on mobile telephone systems, since mobile handset manufacturers have also chosen ARM as their hardware foundation.

Palm has two major hardware licensees today, Handspring Inc. in Mountain View, Calif., which develops products for the general business and consumer market, and Symbol Technologies Inc. in Holtsville, N.Y., which develops rugged systems targeted at vertical applications such as logistics and shipping. But Mace said the number of licensees should grow as PalmSource seeks to expand its hardware base. "We're going to be more aggressive about licensing in the future," Mace said.

That's because Palm and PalmSource believe "diversity" is the hallmark of the handheld market, Mace said. "This marketplace is not like the technology market, where one size fits all. It's more like the clothing market. ... You need choices. The sales department might need smart phones, other departments standard handhelds, and warehouse and inventory management systems another," Mace said.

Mace added that a built-in emulator in the new operating system will allow users to run programs developed for the old operating system -- and in some cases, run them faster.

Holly McDermott, a spokeswoman for Handspring, said, "We believe supporting the ARM processor is the right move to advance the OS," but she declined to say when Handspring would introduce hardware based on the new operating system. Symbol didn't return calls for comment by deadline.

Mace also declined to speculate about when new hardware would reach the market, but he said PalmSource expects to deliver the final version of the new operating system to manufacturers and developers by this summer.

Barney Dewey, an analyst at Andrew Seybold LLC in Los Gatos, Calif., predicted that hardware based on the new operating system should be on sale before the end of this year.

Dewey said Palm OS 5 should provide strong competition to Pocket PC hardware running on Microsoft Corp.'s rival operating system, Windows CE. The new software release puts Palm "on par with the Pocket PC," Dewey said.

Ken Dulaney, an analyst at Gartner Group Inc. in Stamford, Conn., took a more cautious approach, saying that the limited amount of information released by Palm prior to the start of its developers conference made it hard for him to determine whether the Palm OS would be equal to Windows CE. Dulaney said the new operating system does fix what he views as "serious holes" in the older software, including security and screen size.

Dulaney also wondered if the announcement of the operating system would hurt sales of hardware based on the old operating system, including Palm's new i705 handheld, which was introduced last week and features integrated wireless capabilities (see story).

Ed Suwanjindar, product manager of Microsoft's mobility group, said the Palm announcement "could be a case of too little, too late."

"Fact is, we built the Pocket PC to deliver more, and Palm is still stuck playing catch-up," said Suwanjindar. "We'll wait to reserve judgment until we see their new OS on devices. That said, it will be interesting to see if they can meet the customer experience bar we've set, since we're still at least 18 months ahead of them on the technology front with Pocket PC 2002."

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