Although these announcements imply that the move to ARM was Motorola's idea, it's likely the CPU vendor pushed Palm to adopt one of its in-house platforms, such as MCore, to extend the 68000 line. Palm, however, saw an opportunity to break away from a single source for processors and pushed for the more open ARM architecture.

By choosing ARM, Palm can take advantage of Intel's new XScale processor, which is ARM-compatible. XScale delivers better performance with lower power than the ARM9 core that Motorola has licensed. Palm will use XScale for at least some of its future handhelds.

But don't count Motorola out. It will leverage the peripherals in the Dragonball chip that Palm currently uses, creating a new ARM-based Dragonball. But Motorola's chips won't ship until the second half-too late for the first ARM-based Palms.

In either case, compatibility with existing application software will be handled via emulation. Both ARM9 and XScale have plenty of performance to emulate the current Dragonball CPU, which generates a meager 3 Mips. Thus, there is no need to include a 68000 core for compatibility.

Motorola also has the right to modify the ARM9 core, an ability that no other ARM vendor can claim. (Intel is the only company allowed to create its own cores, but it cannot modify ARM's.) Motorola may be able to tweak the core to better match up against the XScale, although probably not in time for Palm's first products.

Palm's decision is seen as a blow to MCore, but it isn't. MCore never had Palm's business. Motorola licensed ARM to retain the Palm account but isn't likely to promote ARM cores in other apps.

The bigger issue, for MCore and other platforms, is that ARM is dominating the mobile market. ARM cores are already used in more than 70 percent of all cell phones. Within a few years, ARM will be in most PDAs using Palm OS, the Symbian OS and Windows CE as well.

As cell phones and PDAs merge, ARM will be the CPU choice. With Motorola, Intel and others backing ARM, rivals will find it difficult to win mobile designs.

Linley Gwennap is Founder and Principal Analyst of the Linley Group (www.linleygroup.com), a Mountain View, Calif., Technology Analysis Firm.