Palm is to drop Microsoft's Windows Mobile operating system in favour of its own webOS platform.

Palm chief executive Jon Rubinstein explained during a quarterly earnings conference call that the company will focus exclusively on the webOS platform that is behind its Pre and Pixi handsets.

"We are launching more great Palm webOS products with more carriers, and turning our sights toward growth," he said. "We are making significant progress with Palm's transformation, and our culture of innovation is stronger than ever. "

Rubinstein added that the company is seeing stronger than expected demand from the business community for its Pre device. The news will be a blow to Microsoft, which is losing support for its mobile platform, a key selling point of which is its appeal to enterprise managers.

Palm's quarterly results were disappointing, however, and the company posted its eighth successive quarterly loss. Palm lost $164.5m (£100m) this quarter, compared to a loss of $41.9m (£25.6m) this time last year.

The company shipped 823,000 smartphones, up 134 per cent on the previous quarter, largely because buyers held off on purchases while waiting for the Pre. However, year-on-year sales were down 30 per cent.

The next quarter will be crucial for Palm's future. The fourth quarter is the strongest time for handset sales, but Palm faces stiff competition from the iPhone and new Android-based handsets from Motorola and LG.