Palm Completes OS Subsidiary Spin-off

Palm, Inc. said Monday that it has completed the creation of a separate subsidiary to develop and market its Palm OS platform.

The company said that its Solutions Group, which will develop handheld devices, will license the Palm OS from the newly-created subsidiary. Other licensees include Handspring, Sony, Acer, Kyocera, HandEra and Samsung.

“The establishment of the Palm OS software subsidiary is an important and cogent milestone toward meeting the commitment we made to our licensees and investors to create two leading independent businesses,” said Palm chairman and CEO Eric Benhamou.

The company said that David Nagel, who is in charge of the OS subsidiary, will provide details about the company’s plans for the subsidiary at next month’s PalmSource Conference and Expo.

Palm also claimed that 82 percent of all handhelds sold at retail in the U.S. during November use the Palm OS and that preliminary figures for December show that figure is even higher. Palm and its primary licensee, Handspring, had been suffered from declining market share earlier in 2001 as handhelds using Microsoft’s Pocket PC platform appeared to be gaining momentum.

Despite those advances by Pocket PC devices, however, Palm-based handhelds from Palm, Handspring and Sony have continued to hold the vast majority of market share. Palm’s said that figures provided by market research firm NPD Intelect showed that devices using the Palm OS had a 82 percent market share in November. The same market research firm reported a 81 percent market share for Palm-based devices in August.

Analysts widely agree that the next major revision of Palm’s platform, due mid-year, will determine its long-term success against Pocket PC, which currently is considered to have more powerful multimedia and wireless communications capabilities than Palm.

Separately, Palm’s Nagel called Pocket PC “bloated.”

“Frankly, the truth of the matter is that they (Pocket PC devices) are much bigger and more expensive products because the operating system is bloated,” Nagel told the Reuters news service in an interview. “It has a lot of stuff that is a holdover from the PC days that simply is not necessary in the enterprise or anywhere else.”

David Haskin is managing editor of sister site, allNetDevices.

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