Brian Blair, an analyst at San Diego-based hedge fund Dorado Capital, reckons testing at PalmOne paves the way for a launch of a Microsoft-based Treo smart phone some time next year. The Treo 600 has been a huge success for PalmOne, counting a number of US and European mobile operators as customers, and the company recently released a more advanced version, the Treo 650. A report out on Monday by Needham & Co analyst Charles Wolf called a Microsoft-based Treo "virtually certain". PalmOne has done a licensing deal with Microsoft to make accessing corporate Exchange email servers easier from PalmOne devices but many users assume Microsoft-based devices are the best at integrating with Microsoft-based desktop and server software. PalmSource and Microsoft have not commented on the possibility of Microsoft-based PalmOne PDAs or smart phones.