Palm sells devices based on Microsoft Windows Mobile, such as the newly introduced Palm Treo Pro, in addition to Palm OS products. But for the operating system that built Palm's business and spawned more than 100,000 applications from 30,000 developers, it has been a slow death. A new, Linux-based Palm OS has been in the works for several years. Applications written for the current Palm OS won't run on the WebOS that succeeds it.

Late Thursday, Palm's shares on the Nasdaq (PALM) were down $0.42 to $7.29 in after-hours trading.