26th September 2005 Handheld computer maker Palm is about to unveil plans to partner with its one-time arch-rival Microsoft, releasing devices running the software giant’s operating system.

Palm is expected to confirm the widely circulating rumours of a partnership with the software giant at a press conference later today.

The announcement would bring to the end years of intense competition between Palm and Microsoft, but is not unexpected.

Palm once went head-to-head with Microsoft in producing operating systems for handheld devices.

But its sell off of its software arm, PalmSource, failed to stimulate demand for non-Microsoft operating systems.

Instead, Palm saw its market gradually eroded by new competition, in the form of the BlackBerry from Research in Motion. The BlackBerry provided users with the majority of PDA functions, but the addition of ‘push’ email capabilities.

Despite strong sales of its Treo devices in the US, Palm has underperformed financially, due in part to poor sales in Europe. The company announced last week that its quarterly profits had dropped by 7% against the same period last year.

The deal with Microsoft – which is intent on building email capabilities to rival the BlackBerry – will also give the Treo enhanced Bluetooth and Wifi support.