Wow! Access Buys PalmSource

This is pretty huge, Access has bought PalmSource!! Access are the guys that make NetFront - the mobile browser which powers most DoCoMo phones, and the new PSP browser as well as being my preferered browser on Series 60 phones. This is a wild combination... PalmSource with its American roots bought China MobileSoft for its Linux OS, is now owned by a Japanese company known for their mobile browser.

ACCESS to acquire PalmSource in an all-cash transaction valued at USD $18.50 per share of PalmSource common stock , or approximately USD $324.3 million (approximately ¥35.9 billion). ACCESS' USD $18.50 per share offer represents an 83% premium for PalmSource stockholders based on the market closing price of USD $10.09 on September 8, 2005.

The acquisition of PalmSource is expected to further extend ACCESS' leadership as a provider of mobile content delivery and Internet access software for mobile devices worldwide. The combination of Palm OS with ACCESS' software products is expected to give ACCESS one of the broadest lines of mobile software in the industry, as well as extend its market opportunity. With this acquisition, ACCESS gains operating system platform expertise and Linux development resources for mobile devices in the U.S., France and China.

"PalmSource is a global leader in mobile device software and the developer of the well known Palm OS operating system," said Toru Arakawa, CEO of ACCESS. "The PalmSource family of software products which run on over 39 million devices, and the PalmSource community of approximately 400,000 mobile application developers, provide an established worldwide mobile software platform. In addition, PalmSource's earlier acquisition of China MobileSoft, a developer of Linux technology, provides the foundation to promote Linux-based platforms for mobile devices. By combining ACCESS' robust NetFront browser platform and its proven business relationships with PalmSource's advanced operating system, application portfolio, user interface and developer communities, we will be able to produce a comprehensive yet flexible solution for the mobile market."

So wow, this is the other shoe. We've been waiting for it to drop since PalmOne bought the Palm name back and created a Windows powered Treo. Now we know why PalmSource was willing to give up the rights to the name. It seemed crazy at the time, but now it makes much more sense.

This move goes back to my statement the other day about Linux. Would Access have bought PalmSource if they didn't own China MobileSoft? Probably not. What this move does is give Access their own OS in which to highly integrate their browser platform. Matt told me that Access was showing a kick-ass new version of NetFront at an Orange CodeCamp, which had high-powered JavaScript support in it, allowing things like AJAX, and more importantly, Widget-style apps. I can imagine that Access has been frustrated having to try to do all this magic on top of RTOSes or smart phone OSes that they don't control. Now they have a real platform on which to grow more advanced services.

Of course this leaves lots of questions out there about the future of the Palm OS, and of the local PalmSource employees. (PalmSource already announced a cut of 16% of its workforce and a focus on Linux phones in July). Does Access want to expand into the U.S. and use PalmSource as the base of their operations? (They'd be silly not to) or is this just a technology acquisition play? Regardless, it's exciting stuff. Access has been a dark horse in the west for a while, it's nice to see them step up with a big move like this.

Very, very cool.


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