Wireless networking and multimedia functions are among advances hand-held maker Palm will add to the latest version of its operating system (OS). The system will also have higher security and support for fast processors. Palm OS 5 was released in beta form during PalmSource, the company's annual developers' conference in San Jose, this week. Palm's new OS unit chief executive David Nagel said the master copy of OS 5 would be shipped to licensee manufacturers by late spring. He also announced the OS subsidiary would be named PalmSource. Much is riding on OS 5 for Palm. Its lead in the hand-held market is being threatened by the increasing popularity of Microsoft's PocketPC OS. OS 5 is the first product to come out since the company acquired software firm Be and announced the spin-off of its software arm into a separate company. Palm's OS runs on about 20 million hand-helds worldwide, where it has a 72 per cent stake against about 90 per cent in the United States. However, PocketPC has made in-roads in the corporate arena, where users are often looking for the ability to run office applications. Some industry observers believe the separation of Palm's hardware and OS businesses should help it become more aggressive in developing and licensing its software. Its latest OS is designed to work with Arm-based processors from Intel, Motorola and Texas Instruments, which support higher speeds than the Motorola Dragonball series Palm had been using. Dragonball tops out at 33 megahertz, while Arm-based chips run at 200MHz or more, making it more feasible to support the functions being introduced in OS 5. These support audio recording and playback, a 320x320 pixel display, Bluetooth and 802.11 wireless networking, and 128-bit security encryption. The program uses 4MB of memory, the same amount required by OS 4. Palm's own hand-held, using the new OS, will ship by mid-year, though other licensees, including Sony and Handspring, have made no announcements. According to some reports, a sample of OS 5 has been in the hands of potential mobile-phone licensees for some time. Also on display on PalmSource's opening day was a Sony clam-shell device with a swivel screen that closes to form a more conventional-looking hand-held. Separately, Motorola said it would co-operate with Japan's Sega to develop games for the Palm OS and Motorola's DragonBall MX1 and Super VZ microprocessors.