Palm has announced a definitive agreement to acquire Extended Systems, a leading mobile-solutions provider.

The move underlines the stress the company has on developing its product as a wireless appliance - revealed in comments on Tuesday from Michael Mace, Palm's chief competitive officer and vice president of product planning and strategy.

Palm plans to bolster its range with a series of wireless products - giving users better access to some of their favourite applications - over the next six months, he said.

Benefits The Extended Systems acquisition gives Palm the opportunity to offer both handheld computers and mobile-infrastructure software, as well as support for multiple operating systems - including Palm OS, Pocket PC, Windows CE, and EPOC.

The Palm 4.0 operating system will provide built-in mobile phone support, an SMS (short message service) client, audible email-notification, increased security and support for both USB (universal serial bus) and Bluetooth wireless technologies.

Palm also plans to improve its Bluetooth support. By the end of this year, Palm users will be able to use mobile phones as modems to connect their Palms to the Internet using Bluetooth.

Palm plans to add several new features in the second half of the year, including add-on thumb keyboards for typing, the ability to conduct electronic transactions, and higher-resolution screens. Palm will also enhance its multimedia functionality to include better support for sounds, graphics and music, Mace said.

By 2002, Palm will introduce units built on a new chip architecture designed by UK-based ARM - in which Apple still maintains a stake.