PalmSource, the separate software wing of Palm, shipped Palm OS 5.0 in Europe yesterday.

The new operating system is the first from Palm to run on ARM processors; offers "significant multimedia features" such as support for 320-x-320 pixel screens – double the resolution of the current generation of devices – and system-level
support for sound recording and playback; and has 128-bit security and SSL (Secure Sockets Layers) support built-in.

Version 5 also supports 802.11b (AirPort) connectivity, complementing its existing Bluetooth and IrDA capabilities.

Competition PalmSource CEO Nagel said: "Windows dominates the desktop now. Most people use a PC at work, but if they don't like Windows it's very difficult to use a Mac at work. There is no real choice any more.

"The handheld market will become very, very competitive over the next three to four years. I welcome that - I don't want to see that market go the way the PC market went."

"The biggest problem with the Mac is its relatively small market share," Nagel said.

Palm released Palm Desktop Software 4.0 to synch data between Macs and Palm-powered devices in September. "We had no problem developing the synchronization features for Mac OS X," he said.

Open source Nagel claimed there has been a seismic shift across the IT industry that favours open, rather than proprietary standards. Apple has adopted this within the open source Darwin heart of Mac OS X, and RealNetworks is opening up its own proprietary solutions to a wider market.

Nagel is a former senior vice president of research and development at Apple, where he led work on the Copland project - an early attempt by Apple to create a next-generation OS: "I wish we'd had OS X when I was at Apple," Nagel sighed

"We are in active conversation with Apple regarding what we can do together to expand the market and the technology," Nagel revealed. He refused to be drawn on specifics, but stressed the "active" status of these conversations. Apple is not a Palm licensee, he revealed.

"PalmSource offers a cooperative development structure to developers. They work on features and share them with us, and we put them into the developer's kits."

"Microsoft has a different, less flexible licensing deal with developers," he claimed.

Nagel added: "The overall effect, PalmSource feels, is that the cooperative development model will spark further innovation. It is very like the open source movement, accepting that all the IQ points do not necessarily rest in your team."

Looking at competition in the market from the PocketPC, Nagel said: "I'm convinced Microsoft loses money on every PocketPC device they sell - but they have a lot of money to lose. Microsoft has become part of the environment, an assumption - it plays the role of IBM in the computer industry of twenty years ago."

IBM was itself the subject of an antitrust case for its monopolistic practices. It became subject to a variety of restrictions on its business practices by the US authorities, yet remains successful today. Ultimately, it lost control of the industry to the desktop computer, which outflanked IBM's market-dominant mainframe computers.

Nagel discussed tactics: "Microsoft has always been very good at detecting best practices among its competitors and loading these its OS. We will continue to do exactly the same with them," he said.

David Nagel is the former chief technology officer at AT&T. Before this he served as senior vice president of research and development at Apple.