While there has been wide spread speculation that Palm will announce their new Nova OS at CES, Business Week has all but confirmed this information. Interesting quotes abound from company executives regarding the new OS and the family of products it will spawn.  "People’s work and personal lives are melding," Colligan says, adding that Palm is aiming for the "fat middle of the market." The Nova OS and supporting devices will aim to fill that market. Colligan was quoted earlier this year as saying Nova would be a, “next-generation operating system with much more capabilities, driven around the Internet and Web-based applications”. Maybe Palm’s new device isn’t a smartphone. Is the fat middle a Palm Social Tablet? The ultimate Facebook device with a large screen that sits neatly between a laptop and a smartphone. An iPhone on steroids, but without the costly 2-year commitment to AT&T or any cellular carrier. Not such an outlandish idea, as many in the Mac community have been calling for such a device. If Apple won’t build one, how about Palm?

As Mike Cain explains, "Palm has something hot. You don’t waste that on a phone. Only Apple can get away with that." Palm’s Jon Rubenstein, who has spent 9 years with Apple, believes "the next 10 years is about the transition from notebook to mobile computing." Nothing mentioned about smartphones. If they went in the direction of building a tablet, you’d build in WiFi, GPS, support for 3G data and include a suite of Web 2.0 applications.  One of those apps should offer the ability to tether your existing smartphone to the tablet for connectivity. Palm insiders are excited, believing the announcement will introduce a product that is truly revolutionary. "I’m fundamentally convinced we’re onto something huge," says Mike Bell, a 16-year Apple engineering star who joined Palm last year. "Some of the stuff we’re working on here is mind-blowing—better than anything I’ve seen before."

Is Palm revolutionizing the smartphone or perphaps creating a mind-blowing Web 2.0 Social Tablet? That latter would certainly deliver the new-ness, but would consumers embrace a product that fills the "fat middle"? One could argue that Palm’s Foleo aimed to do the same thing and the market responded with a resounding "No".

Palm executives acknowledge that RIM’s BlackBerry excels at email and the iPhone dominates the entertainment aspect, so there might just be a market for a Social Tablet. Maybe that’s what Ed Colligan means when he talks about the fat middle? We’ll find out more on January 8th. Stay tuned to Everything Treo for live coverage of the event.