PalmSource bought by browser developer

Access all areas?

Japanese mobile content company Access is to buy the Palm OS, it said today. The move has the blessing of Palm.

Access will acquire PalmSource, paying cash for the shares in a deal that values the operating system developer at $324.4m. PalmSource's Nasdaq-traded share price closed at $10.09 yesterday. Access' $18.50-a-share bid amounts to an 83 per cent premium on that price.

PalmSource's shares shot up in price towards the end of August on speculation that the company was about to be acquired. The stock leapt to well over $10 from a year-low of $7.39. However, the most likely buyer was seen as PalmOne, which recently bought PalmSource's rights to the Palm name and rechristened itself Palm.

Access specialises in Internet access and content delivery software for mobile devices. Its main product is NetFront, a browser which runs on a variety of platforms, including Windows Mobile and Symbian/Series 60. NetFront is the foundation for Sony's PlayStation Portable browser, which it recently bunded with version 2.0 of the PSP's firmware.

PalmSource last year acquired China MobileSoft to boost its ability to pitch its software at the Chinese and Asian markets, and to rebuild the Palm OS, this time on a Linux foundation.

Put all this together and you have, Access believes, a "comprehensive yet flexible solution for the mobile market". Or so the company said today. How its shift from a platform-independent application developer to the owner of an an OS that competes with the platforms on which it builds those applications will play out remains to be seen. Certainly, Access provided no up-front guidance on how the acquisition of PalmSource will alter its approach. Or how it expects the Palm OS' other licensees to react to the news.

The Palm OS' key licensee is Palm, of course. Company CEO Ed Colligan didn't welcome the deal explicitly, but he did say it will "allow us to continue to deliver great products for our customers". He added: "We look forward to continuing our strong working relationship to advance the Palm OS platform."

But Palm has made no secret of its willingness to embrace other platforms - a Windows Mobile version of the Treo smart phone is expected to be announced shortly - so it clearly no longer sees the operating system as central to its offer. ®

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