Palm Responding to iPhone?

The New York Times writes about Palm's recent hire of Paul Mercer, a former Apple engineer, who most recently had founded Pixo. Pixo was a software that served as the basis for the original Apple iPod.

The article suggests that Mercer's work at Palm will involve some form of response to Apple's iPhone announcement.

The designer, Paul Mercer, a former Apple computer engineer, began work three weeks ago at Palm on a line of new products, a company spokeswoman said, but she declined to comment further on the project.

Palm is one of the companies that is felt to be most affected by a succesful launch of the Apple iPhone.