The new software, called Nova, will be an upgrade to is mobile operating system it debuted in the late '90s. It will support touch screens and background programs, according to reports.
The new software is debuting its new phone, called the Pre, which will have a single button, like Apple's iPhone, but also features a slide out keyboard. All items on the screen can be controlled by gestures on the screen.
This will redefine how people use smartphones, said Ed Colligan, Palm's chief executive officer.
Sprint will be the exclusive launch carrier for the Pre, which comes with Bluetooth, Wi-Fi, a 3.1-inch display, GPS, and 8GBs of storage, among other things. Palm did not announce a price for the Pre, but said it should be available some time in the first half of 2009.
Palm, considered a pioneer in the smartphone market, is in need of rejuvenation, and some analysts see the new Nova software as its best shot in years.
Indeed, news that Palm was scheduling a press conference at the Consumer Electronics Show, where the Nova system was unveiled, jolted Palm shares, which spiked significantly in anticipation that the oft-delayed new software was finally on its way, according to Dow Jones.
Some analysts, however, remain skeptical that the company will be able to turn things around.
While the expected new Operating System launch at CES on Jan. 8 represents a glimmer of hope, we remain skeptical as we await more details given the company's lack of timely launches, wrote Jim Suva of Citigroup, who has a sell rating on the stock.
Palm posted a net loss of $506 million for the quarter , or $4.64 a share, from $8.65 million, or 9 cents a share a year earlier.
Revenue dropped 45 percent to $ 191.6 million as it battles players like Apple and RIM's Blackberry.