PalmSource Completes Acquisition of China MobileSoft

Posted By: Ryan Thursday, February 3, 2005 9:25:08 AM

PalmSource today announced the completion of its acquisition of China MobileSoft (CMS). CMS is a leading Chinese mobile phone software company with business operations headquartered with its wholly owned subsidiary, MobileSoft Technology (Nanjing), in China.

PalmSource, China MobileSoft, Linux - WOW!CMS provides mobile device manufacturers and original design manufacturers (ODM) complete, integrated software platforms and user-friendly applications for the Chinese market. CMS currently has 10 licensees shipping CMS software on over 30 phone models in China.

Jiping Wang will continue as CEO of the acquired company and will report to David Nagel, PalmSource president and CEO. In addition, Madeline Duva, CEO of China MobileSoft, joins PalmSource as vice president, silicon and ODM partners, and John Ostrem, founder, chairman and CTO of China MobileSoft, joins PalmSource as lead scientist.

PalmSource acquired CMS as part of its strategy to further extend the Company's leadership as a software provider for phones and mobile devices worldwide. The combination of Palm OS and CMS's software products is expected to enable PalmSource to provide one of the broadest lines of mobile software in the industry, powering mobile phones at all price points in all regions of the world. Over time, PalmSource expects to leverage the work CMS has done with Linux to provide a new version of Palm OS based on Linux. The Company will continue to support the Palm OS(R) Garnet and Palm OS(R) Cobalt operating system software lines.

"This acquisition of China MobileSoft is part of our strategy to expand our focus and provide software to a much wider phone and mobile device market than we have addressed previously," said David Nagel, president and CEO of PalmSource, Inc. "This is the next stage in our growth and a major milestone for the mobile phone industry. We plan to offer the ease-of-use and flexibility that Palm OS(R) is known for to all mobile phones and devices."

Financial Terms
PalmSource issued approximately 1,570,000 shares of PalmSource common stock in exchange for the outstanding equity and rights to acquire equity in CMS for a total purchase price of approximately $16 million. In connection with the acquisition, PalmSource's compensation committee approved the issuance of restricted stock, with a two year vesting schedule, and stock options, with a four year vesting schedule and exercisable at fair market value, totaling 219,966 shares to a total of 141 employees and consultants as part of the incentive plan to retain their services following the acquisition.

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Microsoft is next!

LiveFaith @ 2/3/2005 1:15:23 PM # Q
Watch out Microsoft is next!

:-o

Pat Horne; www.churchoflivingfaith.com

RE: Microsoft is next!
RhinoSteve @ 2/3/2005 1:59:53 PM # Q
Naw, Microsoft doesn't have much emphasis on PocketPC. About the only thing keeping it alive is Microsoft not wanting to loose face.

Anyone that is "good" inside Microsoft avoids the Handheld group like the plague. The amount of iPods and Palms on the Redmond campus is a dead giveaway of this.

RE: Microsoft is next!
TwinTurbo @ 2/3/2005 5:25:48 PM # Q
Sure. MS is not taking mobility seriously. That's why they are developing new mobile enhancements for Exchange and integrating mobile application features into Longhorn. All of which are designed to take advantage of Windows CE based devices. But nobody in Redmond cares since they all use ipods and Palms and linux powered Segway scooters. Sure...ok....

Trust me MS is all over mobility, especially the Smartphone space. It's definitely not the red headed stepchild division over there.

RE: Microsoft is next!
LiveFaith @ 2/3/2005 6:04:25 PM # Q
I'm not talking about the WinMob group ... I'm talking about the whole thing!!!

Pat Horne; www.churchoflivingfaith.com
RE: Microsoft is next!
RhinoSteve @ 2/3/2005 9:11:23 PM # Q
Well they are stumbling all over it. Frankly, I don't see much happening since there is so much infighting withing Microsoft on how to do it. Expect a big cluster f**k that will politically win internally inside Microsoft but not do well in the market place.
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Step Two complete

mikecane @ 2/3/2005 3:05:35 PM # Q
Now where's Step One? -- a device running Cobalt?

RE: Step Two complete
MikeInDM @ 2/3/2005 4:11:01 PM # Q
You would have to ask PalmOne that. :)
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Good news!

temp_user @ 2/3/2005 3:53:24 PM # Q

So, now we have a modified Linux kernel, encouraging!


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Now in the mix...

twrock @ 2/3/2005 9:43:42 PM # Q
"...John Ostrem, founder, chairman and CTO of China MobileSoft, joins PalmSource as lead scientist."

I thought this was the most interesting sentence in the article. "Lead scientist"--I wonder what that really means in the day-to-day working of PSrc. Apparently this man does know how to work in China, and that bodes well for PSrc. But, will the current leadership really listen and learn (or will they just look at this as one other source for $ to make them personally rich while the whole thing comes crashing down around them; cynical, aren't I)? Enquiring minds want to know.

Anyone have any background info on Ostrem? This may be the one of the most important people working for PSrc right now. I'm interested in seeing how this shakes out.

RE: Now in the mix...
voice of chaos @ 2/4/2005 12:05:09 PM # Q
Looks like he's a former SRI researcher who spun off his research in handwriting recognition into CIC, whose software is the basis of Grafitti 2. Explains how China MobileSoft got onto PalmSource's radar screen.

Very interesting...

RE: Now in the mix...
temp_user @ 2/5/2005 2:25:07 PM # Q
Very interesting indeed if you say so! I think Palmsource need to make the right moves right now.

If this guy is so smart, he should perhaps invent new things for us!


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Palm world is another world...

amike @ 2/4/2005 2:58:50 AM # Q
Usually, china firms buy the world .... (lenovo, etc...).
No ! PalmSource was to react to save US honor ... and they bought ... linux :)))

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