Palm Computing has stolen a march on Microsoft with the release of a colour device offering wireless internet access.

The Palm IIIc, which will retail at £349, offers a 256-colour screen with AvantGo internet connection software. Users can dial into internet accounts or email servers using software modems downloaded from the internet or a hard modem that can be slotted into the base of the unit.

Microsoft is expected to demonstrate a similar device at this week's CeBIT trade fair in Hanover. The device has no shipping date.

"This new device is firmly aimed at professional users," said Anne-Marie Bourcier, Palm's worldwide marketing director. "From the end of this month, you will see a lot of applications that will meet the needs of the enterprise."

Organisations which have rolled out previous versions of Palm units include soft drink Red Bull, whose sales force uses Palm III devices, and Safeway, which has distributed units to customers to allow them to create shopping lists at home.

Palm is now relying on its 7900-strong European developer community to create applications for business. Palm's strength in developing bespoke applications has allowed it to maintain a comfortable 72 per cent market share in Europe. This is well ahead of rival devices running the Windows CE operating system, which accounts for 19 per cent, according to analyst IDC.

Users welcomed the addition of colour to the Palm platform, believing that for many bespoke applications, colour is a vital component.

"This will allow us to colour-code tasks according to priority," said Andrew Boswell, chief technology officer at ICL. "Palm units have been preferable to Windows CE devices, which I find are clunky and have a shorter battery life."

The Palm IIIc ships with a new version of the Palm OS operating software, offering improved power management. It has a battery life of more than two weeks, compared with 10 hours offered by Windows CE devices.

Other new features include faster synchronisation between the IIIc and a PC, infrared capability and upgradeable flash memory. The latter is important because colour applications are notoriously power and memory hungry.

Microsoft is expected to announce the latest version of its mobile operating system in the next few weeks. Codenamed Rapier, it will offer improved usability, with a single key required to open applications. The software will also offer greater support for multimedia, including Microsoft's eBook reader and MP3 audio players. Rapier is expected to ship this spring.