PalmSource Makes Run at Open Source

PalmSource today announced that it was going to produce a new version
of its Palm OS to run as a software layer on top of Linux. The move comes
as the mobile OS vendor agreed to acquire Chinese mobile phone software
company China MobileSoft Limited (CMS).

Nanjing, China-headquartered CMS has been developing a Linux version
that is optimized for mobile devices. Under the disclosed terms of the
deal, PalmSource will issue almost 1.6 million shares of its common stock
in exchange for equity in CMS.

“One of the things that is very attractive to us about CMS as a company
is that they have made significant improvements to Linux, specifically
focusing on this particular market — things like long battery life and fast
boot times,” David Nagel, president and CEO of PalmSource, said in an
afternoon conference call. “CMS has done a lot on making a very fast
booting version of Linux.”

In a move ostensibly to help court favor with the community, PalmSource
also issued a letter to the open source community outlining the purpose of its move to

The new Palm OS will run as a
software layer on top of a barebones Linux OS comprised of a Linux kernel
and certain mobile Linux services, the company stated. Palm’s OS will deliver the user
interface, middleware and applications for the mobile device. Existing
Palm OS applications should, according to PalmSource, be able to run
unchanged on Palm OS for Linux after platform recompilation.

PalmSource made it
clear that the move does not mean that Palm OS will be open sourced,
though Nagel and the letter both noted that certain aspects of the code
might be contributed back to the open source community.

Nagel reminded the conference call that this would not be PalmSource’s
first foray into the open source community. Earlier this year, the company
announced a new free developer toolkit based on Eclipse. PalmSource is
also a member of the Eclipse Foundation.

The move is hoped by PalmSource to help it gain more users in what they
believe to be win for themselves and for Linux.

“We think the combination of Palm OS and Linux can attract more mobile
licensees and developers, create more new devices, and bring in more users
than either could on its own,” Mike Kelley, PalmSource vice president of engineering
wrote in the open letter.

“Participating in the open
source development of Linux is a natural extension of our culture,” he continued. “Our
business has always been based on open innovation. Unlike certain other
mobile platform companies, we encourage licensees to make changes to our
OS, and we don’t put onerous restrictions on what sort of hardware they
can create. Also, we try not to prey on our application developers; we
rely on them to provide many of the most important features of our

PalmSource has not set a shipping date for the Linux product, but it expects
to disclose more information at its spring developer conference.

Palm has been on the steady decline in terms of market share in the
embedded OS market of late. According to a pair of
recent studies,
the embedded crown now rests with Microsoft.

Research reported that Microsoft beat Palm in third-quarter 2004 PDA OS shipments,
marking the first time that Microsoft has beaten the perennial PDA OS leader
in the category that Palm helped to create. Palm OS shipments declined by
28 percent, and its market share fell from 46.9 percent in the third quarter of 2003 to 29.8 in
in the third quarter of this year. Windows CE recorded 32.6 percent growth and saw its share hit 48.1
percent up from 41.2 percent last year.

Vendors have been fleeing Linux as an OS for PDAs, with Linux having a
growth rate of negative 49.5 percent and reporting only a 0.9
percent market share in Gartner’s data.

But in the embedded marketplace, Linux has been gaining favor.
Wind River and
MontaVista Software have all
made inroads in the embedded space.

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