Microsoft, Palm Unveil Treo Running Windows Mobile 5.0

On Monday, the two firms -- once fierce rivals in the mobile operating system space -- announced the co-development of a CDMA-based Treo device running Microsoft's Windows Mobile 5.0.

Due in early 2006, the new Treo initially will be be distributed exclusively by Verizon Wireless on its advanced EVDO wireless broadband network, and brought to other U.S. carriers later that year, executives said. The device will support Exchange ActiveSync, multimedia and WiFi cards, executives said.

Palm claims it will continue work with its current OEM partners and develop devices based on the Palm OS. But the deal -- and new Treo on Windows device -- could enable the two mobile software giants to stomp on alternative operating systems in the smartphone space, including PalmSource and Linux, and steal market share from RIM's Blackberry in the business space, partners said.

"Many times when we were selling enterprise solutions we would have to have Microsoft come in and compete against Palm as a platform. It takes away PalmSource as a viable enterprise Mobile OS making it easier for us to sell Windows Mobile solutions,'"said Simon Chan, director of Business Development for Iteration2, a Microsoft partner in Irvine, Calif. "Now it seems Blackberry is the only real competitor left but that is really for just e-mail and not other enterprise applications."

Another partner said the collaboration will enable Microsoft and Palm to dominate the enterprise market, given .Net's reach into popular business applications.

"This is a huge coup for Microsoft," said Ted Dinsmore, president of New York-based solution provider, Conchango. "This solidifies Microsoft's position in the mobile market. [Nokia-backed] Symbian has been turning it back on the enterprise market."

Microsoft Chairman Bill Gates and Palm President and CEO Ed Colligan demonstrated the forthcoming device running Windows Mobile 5.0's Mobile Outlook, Mobile Office and attachments on a Treo, but they declined to provide exact specifications and pricing. Gates said customers interested in using Treo on Windows need only apply updates to their client software and Exchange server to get push e-mail capabilities.

One source said the device is currently dubbed the Treo 700w, but that could not be confirmed as of press time. Colligan said Palm and Microsoft engineering teams have worked closely for some time to unite the best of Microsoft's mobile 5.0 software with Palm's hardware innovations, including Palm's quick dial-by-contact, patented voice mail technology and a new streaming radio player.

Additionally, the ability to use the Treo Windows handheld over Verizon's EVDO network -- a new wireless Internet broadband cellular service -- offers broader usage than is possible with current WiFi hotspots, said Denny Strigl, chief executive officer of Verizon Wireless.

Microsoft's chairman said it is a leap forward for both firms and Verizon in the mobile business market. Advances made in Microsoft's recently released Windows Mobile 5.0 and Exchange that support push e-mail, Gates added, will give Blackberry a run for its money.

"It's a big day for us," said Gates, adding that only about 15 million of the company's 131 million users of Exchange have mobile e-mail today, and a third of them are RIM users. "This is a big growth market. People more and more want to work out of mobile locations and integrate communications … Exchange e-mail, voice mail, instant messaging and telephony."

The Treo on Windows device will support multimedia, Microsoft's ActiveSync technology for integrating multiple e-mail platforms and a slot for WiFi cards.

As development for Windows Mobile 6.0 and Mobile 7.0 gets under way, Gates said software and hardware partners will consider integrating into the Treo device bar code support, language translation and voice recognition capabilities and a mapping service.

Verizon's Strigl said the company's wireless cellular network covers about half the U.S. population and is available in 84 major metropoitan areas. He did not confirm whether the network will support television on Treo but hinted that work is under way to enable full television programming on portable devices.

He added that a number of laptop makers as well as Palm are equipping their new models with EVDO modems and will make wireless business computing more pervasive and reliable.

"This works not just in isolated hotspots ... our network stays with you in the cab so you really don't have to drink a cup of coffee, " the Verizon Wireless executive quipped, alluding to the industry's earliest WiFi hotspots enabled at Starbucks locations.