Amid talk of a possible buyout of the company, Palm CEO Ed Colligan announced Tuesday at an analysts' meeting in New York that Palm will combine a new Linux-based platform with the Garnet OS for new products released later this year. The move means that Palm will have its own OS, rather than having to rely on the OS it has licensed from Access.

Palm had spun off its OS into a separate company, PalmSource, which was later purchased by Access, a Japanese company. PalmSource, which later changed its name to that of its parent company, then licensed the Palm OS to Palm and other device manufacturers. Palm OS was renamed Garnet.

In December of last year, Palm purchased a buyout of the Palm OS from Access for $44 million in a deal that allows Palm to modify the code. Previously, it had been paying royalties. Access is also releasing its own Linux mobile platform.

'A Major Development'

This is "definitely a major development" for Palm, said Stacy Sudan, an analyst with technology research firm IDC. "They are indeed developing their own Linux platform."

"There is a lot of activity going on around mobile Linux now," she noted, with a lot of success in Japan. "Because it's an open-source system," she added, "there is very large open-source community. And, the more developers there are, the more creativity there is."

Gartner analyst Todd Kort agreed that this is a significant development for the company. "I guess you would say that Palm is now back in the OS business," he said. "I like the fact that they're now a little more in control of their destiny. Since Access acquired PalmSource, the operating system hasn't been updated."

He said it is likely that the new OS will look like the existing one and "the end user will not notice," but the "underlying pipes" will change. The new OS needs to modernize the current Palm OS, he said, such as supporting "true multitasking."

Colligan also indicated that the new platform will help Palm deliver better battery life, instant-on capabilities, and better Web browsing and services.

Could Become 'Like Apple'

"Palm is a small company, but they're pretty well managed," Kort noted, "and they've had one hand tied behind their back because of the OS. Once they get this OS situation figured out, I think they could become a reasonably strong niche player, like Apple in the PC world."

It is not clear at the moment, Sudan said, whether Palm would be partnering with Access at all, such as for middleware. The company has announced it is partnering with Opera for a mobile Web browser.

CEO Colligan said new products would be released this year from Palm, using both the existing OS and the new Linux-based platform. He also mentioned "major new areas" that Palm is developing, noting in particular an upcoming announcement in May by Palm cofounder Jeff Hawkins.

Kort noted that Hawkins is reportedly working on a new, "secretive" project. Because Hawkins has been investigating brain research at the University of California at Berkeley, Kort said, there has been speculation that the new project might have "some artificial intelligence functionality."