The Wall Street Journal is reporting that the touch screen fever has reached to the HP headquarters. The company is developing a new smartphone based on its widely known iPAQ brand.

Apparently the new smartphone will have a touch screen, a keypad and it will be powered by Microsoft’s mobile OS: Windows Mobile 6.1.

The novelty is that HP will concentrate on consumers, rather on corporate clients. The iPAQ brand was acquired by HP in 2002, along with Comapq. The most recent device, iPAQ 910, was launched earlier this year.

However, HP has concentrated to sell and promote iPAQ devices withing the business market.

Also, The Wall Street Journal noted that the new smartphone, which is expected in the next two months, will be released first in Europe. It will have e-mail capabilities and Internet access.

The news about HP follows after Nokia announced its first touch screen phone, Nokia Xpress 5800. Also, this month T-Mobile will release Google’s branded HTC Dream, which also has a touch screen and a keyboard.