Palm has secured a USD $100 million equity lifeline from Elevation Partners just a few weeks before it unveils its new Nova operating system.

Faced with mounting losses and weak smartphone sales, the success of the new operating system could very well decide the company’s fate.

The equity investment by Elevation Partners, which already holds a large stake in the handset maker, will help underwrite the cost of launching Nova and the first line of products to run on it.

Palm has revealed little about the new operating system but reports suggest it will be pitched between RIM’s enterprise-oriented Blackberrys and Apple’s more multi-media iPhones.

Palm just posted a loss of USD $506 million in its fiscal second quarter and saw both its revenues and the number of smartphones sold drop.

Earlier this month, Palm announced that Douglas C. Jeffries had been appointed as the company’s Chief Financial Officer.

Previously chief accounting officer at eBay, Jeffries will join Palm in January as replacement for Andy Brown.

Roger McNamee, co-founder of Elevation Partners, which also counts rock star Bono among its investment team, was in no doubt about the potential for Palm.

"We believe that Palm is in a position to transform the cell phone industry, and we are pleased to have the opportunity to make this additional investment in the company," he said.

There are many who seriously doubt that.

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