HP may be preparing to launch an own-brand, updated version of O2's XDA Atom compact wireless PDA phone.

According to Chinese-language newspaper the Commercial Times, Taiwanese contract manufacturer Quanta, which is building the device for HP, will begin volume shipments of the product some time in H1 2006.

The report suggests HP's version of the Atom will sport Windows Mobile 5.0 and incorporate a quad-band GSM/GPRS radio with support for the EDGE higher-speed data-transmission specification.

CT also claimed HP and Quanta were discussing the development of a 3G device. No other details of the 2.5G version were provided, but the Atom is based on a 416MHz Intel XScale PXA272 processor backed with 128MB of ROM and 64MB of RAM. The unit has a 2.7in, 240 x 320, 262,000-colour display.

In addition, the Atom supports 802.11b Wi-Fi and Bluetooth 1.2.

Quanta is reported to have indicated it expects to ship 1.5-2m PDA phones in 2006. ®