Palm's next-generation Nova operating system has been in the works for more than a year and is expected to be released this week at the Consumer Electronics Show in Las Vegas. Also rumored is one more surprise -- a new smartphone using Nova.

Although the rumor of a new phone has been swirling since last month, it's expected to debut at CES on Thursday.

Jon Rubinstein, Palm's executive chairman, told Business Week that the company will launch a product that bridges Research In Motion's BlackBerry devices and Apple's iPhone. Rubinstein worked for Apple for nearly a decade.

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