Palm unveiled a Treo smartphone Wednesday based on Microsoft software to compete for business users against rivals such as RIM's BlackBerry. The new Treo Pro will be sold by Vodafone Group Plc and 02 in Europe in September (from free to EUR 399 with contract), and by Telstra in Australia (from free with contract), Palm said.

In the United States, Palm does not have an agreement with a carrier to sell the phone, but it said enterprise demand is growing for unlocked phones that can work on any network.

The smarthphone will go on sale in the U.s. for $549, which is considered as expensive provided that the device is unlocked and unsubsidized.

The Treo Pro is Palm's second phone with Wi-Fi and Global Positioning System (GPS) technology.

Palm said the use of Microsoft's Windows Mobile 6.1 software would help it compete with RIM's BlackBerry Bold, a high-speed phone that goes on sale in Canada this week and is expected to be launched in the United States later this year.

Palm was on track to come out with a new phone software platform aimed at consumers in the first half of next year, and that this would put it in more direct competition with the iPhone from Apple.