Palm has announced a new type of mobile device, as it continues its product-line transition from simple personal digital assistants (PDAs) to more advanced smartphones.

Consumer electronics vendors are rushing to develop handsets that offer mobile email and internet browsing instead of merely calendars and contact lists. Apple added fuel to this fire in January when chief executive Steve Jobs announced he would launch the iPhone in June, combining the iPod music player with a digital camera, smartphone and touchscreen display.

Now Palm has unveiled the Foleo, its Linux-based smartphone that Palm chief executive Ed Colligan had promised to release before the end of 2007. Such a device would improve performance compared to Palm's current Treo by running the Palm OS on top of a Linux kernel, Colligan told analysts at the company's annual investor day in April.

Palm will also continue to use Microsoft's Windows Mobile operating system (OS). In the PDA segment, vendors used Windows on 62.1% of handsets in the first quarter of 2007, compared to just 0.7% for Linux, according to Gartner.

By continuing to develop applications on both tracks, Palm hopes to win customers by offering them more options with its Treo smartphone than competitors like RIM's BlackBerry, Motorola's Q and Samsung's BlackJack.

Analyst Jack Gold, founder of the research firm J. Gold Associates, said: "They are being left behind by the likes of BlackBerry and Nokia and Moto as far as device design goes. [But] they don't want to lose their bread and butter clients, who are mostly business users who want an email device."

The 2.5-pound device connects via Bluetooth to a Treo smartphone (the company says it can also connect to any other Palm operating system or Windows Mobile smartphone) to provide a larger screen (10 inches) and full-size keyboard. Aimed at the power wireless email user, the $500 Foleo (or £253 after $100/£51 rebate) is expected to come out "sometime this summer," Palm said.

But the Foleo is practically in ultramobile laptop territory in the opinion of Network World’s Keith Shaw. For example, he says the Foleo has memory capabilities, through a Secure Digital card slot as well as a Compact Flash slot (stored behind the Foleo's battery). Data, therefore, can be stored on a Foleo, although a lot of it is synchronized wirelessly between the Foleo and a Treo (email, attachments, folders and contacts are synched). The Foleo includes the Opera web browser, and built-in Wi-Fi means users can surf the internet without needing a Treo connection – although they could also surf via a Treo's wide area network (WAN) connection if no Wi-Fi signal is available. The Linux OS allows third-party developers to get on board with additional applications for the device.

Other features include an "instant on" button that powers up the unit and a one-touch email button that instantly connects users to their Treo email; a battery with five hours of life; and editors that let users view Word, Excel, PowerPoint and PDF files. Ports on the Foleo include VGA out, USB, power outlet, and headphone jack.

Keith Shaw, Network World contributed to this article