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PalmSource ACCESS Deal Gets Antitrust Clearance

Reuters is reporting that US antitrust authorities have approved ACCESS's plans to acquire PalmSource for $324 million in cash.

The merger agreement has been approved by the board of directors of each of ACCESS and PalmSource. The acquisition is expected to be completed by the end of 2005 calendar year. ACCESS plans to make PalmSource a wholly owned subsidiary.

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$324 Million Blown

Gekko @ 9/29/2005 4:21:54 PM # Q

Fools!


RE: $324 Million Blown
SeldomVisitor @ 9/29/2005 4:37:10 PM # Q
It ain't over til it's over.

ACCESS itself has about $90,000,000 (from its and the Tokyo Stock Exchange web pages).

Where's the rest coming from?

Will "THEY" want to go through with this now?

Whatta game!

RE: $324 Million Blown
cervezas @ 9/29/2005 4:50:56 PM # Q
SeldomVisitor wrote:
Where's the rest coming from?

Never heard of a leveraged buyout?

But I think I may know where a chunk of that change may have come from. Chuckle...

A certain company that couldn't afford the market price for PalmSource but had a lot to gain from tipping the advantage to the bidder who wasn't a direct competitor.

Gotta wonder.

Which brings up an interesting question: if Palm has more or less given up on Palm OS (particularly Palm Linux) as some here contend, why were they bidding $260M+ to try to acquire PalmSource? They shouldn't have had much use for them, it seems to me. They didn't need it for Palm Linux if Gekko's interpretation of the recent press conference is correct. Surely they had no interest in Cobalt, which everyone here seems to agree is a piece of s*** even though they've never seen it. And they shouldn't have cared if "Company A" bought their damaged goods if they now see Windows Mobile is the one and only wave of the smartphone future. So that leaves Garnet. Do you really think they'd have offered that kind of money just to be sure they could use Garnet for a couple more years?

If so, they really are stupid.

Your interpretation of Palm's sizable bid?



David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: $324 Million Blown
hoodoo @ 9/29/2005 5:03:05 PM # Q
They're probably raising the cash through a debt or equity offering.

Now's your chance to get in! ;)

RE: $324 Million Blown
SeldomVisitor @ 9/29/2005 5:35:51 PM # Q
I have zero idea who "they" are, of course - but "they" have GOT to be wondering about all this...to get that money ACCESS has to borrow it - those from whom they borrow are "they".

W.r.t PALM making some sort of extremely HIGH bid - who says!?

Last I read PALM bid - that literally is the extent of our information.

RE: $324 Million Blown
Gekko @ 9/29/2005 5:42:15 PM # Q

Beersie - they probably did the math and looked at the cost of licensing PalmOS over the next X years and figured they could buy the whole damn company for $YY and even get some additional IP and other misc revenues. But then that idea was not feasible anymore when the bid price for the whole damn company far exceeded the license payments. It's not quite as cloak and dagger as you think. At the end of the day, they told those crazy Japanese - "$324M??? You can have it."



RE: $324 Million Blown
cervezas @ 9/29/2005 5:43:56 PM # Q
Last I read PALM bid - that literally is the extent of our information.

No. Palm is the "Company B" referred to in the 9/23 filing (http://tinyurl.com/bhszc). We know that by process of elimination:

* It obviously wasn't company A if you read the "Background of the Merger" section of that filing. They never dropped out of the bidding as we're told Palm did.

* The only other company in the running after the initial meetings was "Company C", which "determined that it was not prepared to make a proposal to acquire PalmSource" before the bidding even began. So that doesn't fit the description of Palm having actually made a bid.

According to the filing, Company B placed its final bid "in the range of $15.00 to $15.90 per share" on Sept 7. By my calculations that's at least $262M.

The simplest explanation for an investment of kind of money is an amortization of the cost over an extended period of time (i.e. serious interest in Palm OS over the long haul). You might be able to concoct some more exotic explanations, but given the weight of other evidence (the renewal of the license for $65M, the continual statements that they are still committed to Palm OS, and the openings for 17 Linux engineers on their web site) I think the simplest explanation is probably the correct one.



David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: $324 Million Blown
Gekko @ 9/29/2005 5:47:22 PM # Q

they = Palm, Inc.

RE: $324 Million Blown
cervezas @ 9/29/2005 6:08:48 PM # Q
Gekko wrote:
they probably did the math and looked at the cost of licensing PalmOS over the next X years and figured they could buy the whole damn company for $YY and even get some additional IP and other misc revenues.

"Other misc revenues"... Heh. I love it when you talk through your a**, Gekko.

I'd be interested to see your idea of what the value of X would be to justify YY = $262M

I don't know what Palm's royalty payments to PalmSource are these days and I'm too lay at the moment to look them up, but I'll take a wild guess and say that to even break even X has to be something on the order of 5 years. To translate that span of time into "mobile device years", it was about 5 years ago that Palm announced the Palm IIIc.

You can quibble with the figures if you have better ones, but it doesn't sound to me like Palm is planning to abandon Palm OS any time soon. At least they sure weren't on Sept 7, 2005.

David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: $324 Million Blown
Gekko @ 9/29/2005 6:36:31 PM # Q

>"Other misc revenues"... Heh. I love it when you talk through your a**, Gekko.

Beersie - you're killing me. My guess is that PSRC had some small revenues other than licensing the OS - ie related software or developer kits, etc.?



RE: $324 Million Blown
cervezas @ 9/29/2005 6:53:01 PM # Q
My guess is that PSRC had some small revenues other than licensing the OS - ie related software or developer kits, etc.?

Yeah, small as in "guess how much is in my wallet right now."

They have a $150 developer program that a few dozen people might sign up for. Palm could start their own if they wanted to get that juicy cash cow. I'm sure the DevCon doesn't make them money. All the services they produce are part of agreements to their licensees.

When I asked a PalmSource exec back in April where their revenue sources were he told me 100% came from selling licenses.

That was before they sold their rights to the "Palm" name ;)

You see my point.


David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: $324 Million Blown
hotpaw4 @ 9/30/2005 1:40:50 AM # Q
If Nokia wasn't just bluffing, what did they know which caused it to made sense for them to bid almost as much as ACCESS for PalmSource?

The original N-Gage was dumb, but Nokia didn't get that big making mistakes too often.


RE: $324 Million Blown
hkklife @ 9/30/2005 1:48:32 AM # Q
Plinux is closer to shipping by a year than any of us thought?
Cobalt, in whatever state it was in when they offically dropped development on it in July, is semi-usable and someone's going to ship a device(s) with it soon?

Sorry, I'm fresh out of plausible ideas. But someone must've known SOMETHING, right? Other than the N-Gage and perhaps the stillborn PC monitor line, I've never known Nokia to make a big fumble. Yes, some products like the original 9000 communicator didn't catch on like they hoped but overall they play it safe and have very few outright failures.

RE: $324 Million Blown
cervezas @ 9/30/2005 2:11:35 AM # Q
hotpaw4 wrote:
If Nokia wasn't just bluffing, what did they know which caused it to made sense for them to bid almost as much as ACCESS for PalmSource?

First of all, we don't know if Nokia was Company A, that's just a supposition. Could have been Motorola, Qualcomm, any of a number of different companies that could fit the description of being "communications technology" companies.

Moto makes sense, actually. They moved away from Symbian two years ago and last year had one of their Windows Mobile phones (the MPX) do poorly in part because it was designed for Window Mobile 5, which was late to release(latter info from Surer). Meanwhile they've been working on several Linux phones division. What they don't have is a great framework (GUI and application frameworks, e.g.) for these Linux phones. Palm OS could be just the ticket they want.

As for Nokia, they are making a pretty important Linux play with their Maemo platform, a Linux distro for their upcoming 770 Internet Tablet. It's possible that they would like to be able to release other Linux devices but not have to give away all the work they do on the GUI and apps as they will for Maemo under is it's open source license. Enter PalmSource (both developers and code).

Either seems fairly plausible, as does the price, if you assume these companies are as optimistic about Linux's future as a smartphone system as they seem to be.

David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: $324 Million Blown
arp @ 9/30/2005 5:54:32 AM # Q
It will be very interesting to see what ACCESS actually does with PalmOS. Use it as a vehicle for selling netfront? :)

--
my top 10 palm apps --> http://www.arpx.net/article.php/top_10_palmos_applications
RE: $324 Million Blown
sr4 @ 9/30/2005 6:12:30 AM # Q

Its undeniable that Access sees some great value in PSRC. Its also not denialble that Palm does not, as well as the other bidders, interested or not interested. Its certainly difficult to exlplain why so much will be paid, even to enthusiasts of the platform. That implies that whatever Access's plan is, its not obvious and rather risky, and that this whole venture is quite speculative.

To put it differently, would you invest in Access on the basis of this large aquisition? If you believe the likelyhood of a pay-off justifying their large investment is good, then they would be a sensible investment. If however you would not invest in them because you feel the PSRC purchase has not improved their situation and likelyhood of future dividends or capital increase, that reflects on your view of the future of POS.

Surur

RE: $324 Million Blown
SeldomVisitor @ 9/30/2005 6:53:54 AM # Q
Wait til October to see who sues who.

RE: $324 Million Blown
Timothy Rapson @ 9/30/2005 8:40:39 AM # Q
RE Surer: "That implies that whatever Access's plan is, its not obvious and rather risky."

I have been so waiting to read someone who puts this point so clearly. I have not been able to express it so well.

RE Seldom.

One of the "catches" in the original deal states that if Access doesn't come up with all that money, they forfeit several million bucks. To me, that means PS already knows the deal is iffy. So, will they have to sure Access the get that earnest money when it all falls through? October.

RE: $324 Million Blown
hkklife @ 9/30/2005 9:38:09 AM # Q
Wasn't Moto in talks to become a POS licensee a few years back? I have always heard Compaq was ready to get onboard and even had a prototype unit running back in '99 or so.

Moto's lately been flailing around for new revenue sources--see their aborted entries into home theatre gear, flat-panel TVs, wi-fi networking equipment, their on/off efforts with home POTS phones etc.

I'd say that it had to have been primarily been Moto or Nokia with any number of Asian firms in the running as well.

I personally forsee the source code & all IP of FrankenGarnet & the remnants of Cobalt being sold sooner than later by Access in order to raise some $$ and pave the way for PLinux. I still say that Palm might attempt to leap-frog Access and buy up said IP and write their own Garnet/Cobalt/Linux hybrid FrankenOS. After all, Palm is no stranger to crazy-quilt OS development. That'd be a great way to pull the rug out from under Access longt-term and to circumvent paying licensing fees down the road. What remains a question would be their agreement to use POS through '09--maybe that would be negated with the sale of the existing OSes' IP?

RE: $324 Million Blown
cervezas @ 10/3/2005 4:04:30 PM # Q
Surer wrote:
Its undeniable that Access sees some great value in PSRC. Its also not denialble that Palm does not, as well as the other bidders, interested or not interested. Its certainly difficult to exlplain why so much will be paid, even to enthusiasts of the platform. That implies that whatever Access's plan is, its not obvious and rather risky, and that this whole venture is quite speculative.

Surer you're completely out to lunch on this one.

You and I may look at our wallets and think a $300M+ deal is rich for PalmSource, but the fact is that three major companies including Palm all made offers over $300M. If no one were even close to the ACCESS offer, that might be cause for raised eyebrows, but with industry leaders like Palm, and Nokia or Motorola agreeing with this valuation isn't it a little silly for a bunch of enthusiasts to say things like "I wouldn't pay that much, would you?"

There's risk in a deal this size, of course, but downside risks were accompanied by upside opportunities that all participants to the bidding clearly recognized, the big one being the opportunity to bring an open turnkey phone platform to Asian phone makers who currently go to great time and expense to avoid licensing Microsoft or Symbian OSes.

The share price ACCESS paid is still well below PSRC's valuation when Cobalt looked poised to be the OS that would bring Palm OS onto next-generation smartphones. Yet Cobalt was saddled with the same proprietary baggage that is hampering WM and Symbian in Asia. Palm Linux is not. Add to this that smartphone adoption has now hit the bend in the hockey-stick growth curve and that there are only two other major players in a market where differentiation is the name of the game.

So what's the big surprise here, guys? I realize it's a bit of a shock when the light of reality impinges on the darkness that you see with your heads in the doom-and-gloom sand, but try to pick yourselves up and get with the program.

David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: $324 Million Blown
sr4 @ 10/3/2005 4:54:52 PM # Q
Oh come now David. Its not just me thats surprised, its the whole industry. That is why the PSRC valuation is a mystery.

Surur

RE: $324 Million Blown
cervezas @ 10/3/2005 4:58:41 PM # Q
Correction: Palm's high bid was in the range $262-278M, not $300M. Still a 50% premium, and given the size of Palm and the sacrifice they'd have had to make to come up with that kind of financing it's clear that they saw an extraordinary opportunity in PalmSource (or more pointedly, an extraordinary downside risk if PalmSource went into the wrong hands).

Since Palm's business has been set up around being a licensee and not an OS vendor the purchase by ACCESS is probably as good or better for them than if they had bought PalmSource themselves. In fact, I still think it likely that the $324M that Access offered was made with some financial support or other commitment from Palm, whose primary concern was to keep Palm OS out of the hands of a competitor. If I were Ed Colligan I'd want to be damned sure that ACCESS thought twice before backing out of this acquisition. And if I'd been Toru Arakawa watching the bidding war heat up I'd have been on the horn with Colligan the moment Palm dropped out: "What's it worth to you to keep Palm OS from being owned by Nokia/Motorola, Mr. Colligan?"



David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: $324 Million Blown
cervezas @ 10/3/2005 5:14:46 PM # Q
Surer wrote:
Its not just me thats surprised, its the whole industry.

It's not the "whole industry." It's just a bunch of analysts, who scarcely know more than you and I. If you want to know what the industry thought it's easy to tell: they were the guys who bid it up to that price.

David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: $324 Million Blown
sr4 @ 10/3/2005 5:20:25 PM # Q

From that Form PREM14A 23 Sept filing, 2 companies wanted PSRC, 3 others were approached, 1 was not interested, 1 looked at PSRC and decided it was not worth it, one put in a 1/2 cash, half stock offer at $11/share and was rejected, and the two original suitors were left over.

This means of the 5 companies in the industry PSRC thought were relevant, only the two companies who already had plans for PSRC saw significant worth, and two others did not even put in an offer.

See, its not as clear cut as you think it is.

Surur

RE: $324 Million Blown
sr4 @ 10/3/2005 5:45:25 PM # Q

In fact "Company B" went up to $15/share. still 1/2 cash, 1/2 share. I think, unless Palm is a "communication company" (they do have the Treo) I would have to say Palm is company B, who refused to raise their bid. They refused to pay >$126 million, which is barely bigger than their outstanding license fees (41.0 million +$42.5 million + $35 million + $20 million + $10 million = $148.5 million).

Basically Palm thinks PSRC is worth no more than they have paid for it already until 2009.

Surur

RE: $324 Million Blown
cervezas @ 10/3/2005 5:55:05 PM # Q
Go back and read it again. The three suiters were ACCESS (named), Palm (the one with that made the half-stock offers) and the mysterious Company A, which people seem to think is either Nokia or Motorola. If you read on farther you see that Palm came back with successive bids leading up to their final bid of $15.00-15.90/share and Company A bid $17.25. All were in the bidding right up until Sept 7. And all of them knew the cost of backing out if they won, so they believed they believed they'd have no trouble raising the cash. That is, their funding sources were as convinced of the value as they were.

If you don't think an 18-day, multi-round bidding war between three major companies is a recognition within the industry that PalmSource was worth a lot more than its August market cap I don't know what kind of evidence would convince you.

All of us here were suprised. But the size of the offer isn't surprising in hindsight. Not once you know the background of the merger and consider where the smartphone market is today.

David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: $324 Million Blown
cervezas @ 10/3/2005 6:28:30 PM # Q
I think, unless Palm is a "communication company" (they do have the Treo) I would have to say Palm is company B, who refused to raise their bid. They refused to pay >$126 million

It's taken almost a month but you're starting to catch on! Palm was Company B, yes. But last I checked, a half-stock deal where the cash is $126M also includes stock valued at the same amount. And in this case the cash part of the offer was stated to be in the range of $131-139M cash, not $126M. (Not sure where you got that number.)

So your story is that since Palm was unwilling to pay more than a whopping 50% premium for PalmSource, who it had gone to considerable trouble a few years ago to divest itself of for a position in the hardware market, we can conclude that Palm wasn't very interested; is that what we're to understand?


David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: $324 Million Blown
sr4 @ 10/3/2005 6:37:10 PM # Q
Noted and answered above. Palm was just trying to save themselves some money.

Surur

RE: $324 Million Blown
cervezas @ 10/3/2005 6:46:01 PM # Q
Surer wrote:
Palm was just trying to save themselves some money.

Buying PalmSource would not have saved them any money at that price--not for a long time, at least. They'd have to cover PalmSource's losses for one thing, and those losses would have mounted even faster as soon as the companies reunited. That's because the licensing revenue from the Palm OS would be a fraction for Palm what it would be for a company like ACCESS. This is what people don't seem to get.

ACCESS could bid higher than the rest because it was the only company that wouldn't have been in competition with its OS customers. No one likes to have a competitor as a critical supplier, so had Palm, Symbian, or Motorola bough PalmSource it would have greatly limited the market for Palm Linux. Remember how Motorola dropped Symbian after Nokia got a majority holding?

Palm's bid was not a big for PalmSource so much as a bid against PalmSource going to its competition. That's why Colligan was so happy to endorse the ACCESS buyout after losing the contest. ACCESS is a partner, not a competitor. It may be be even more of a partner with Palm than we know! :)


David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: $324 Million Blown
sr4 @ 10/3/2005 6:53:36 PM # Q

If Palm was very interested they sure could not convince their bankers they had a viable plan to recoup the investment. The first $148.5 million was essentially free, as they owed PSRC that already.

And if they did not think their was a viable ROI, who are we to argue. And who knows PSRC and their shenanigans better than Palm?

Surur

RE: $324 Million Blown
cervezas @ 10/3/2005 7:01:58 PM # Q
If Palm was very interested they sure could not convince their bankers they had a viable plan to recoup the investment.

Well, yeah. As I just said (and have been saying since TVoR first started talking about Palm reacquiring PalmSource) it would not have been a good idea since it would likely have squashed the Palm Linux golden egg. It was highly unlikely their bankers would be willing to put up anywhere near as much as ACCESS's bankers. They're the same bankers who negotiated the spin-off, after all, so they understand this risk very well.

Palm made a damn fine run of it all the same. I'm impressed they (and their bankers) came in with anything close to $15/share.


David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: $324 Million Blown
sr4 @ 10/3/2005 7:08:53 PM # Q

This was the supposed motivation for the PSRC/PalmOne split, but we know how well that turned out, with >90% of POS licenses being sold by Palm.

Surur

RE: $324 Million Blown
SeldomVisitor @ 10/3/2005 7:20:24 PM # Q
The last yearly report (I think) out of PSRC mentions that PALM is/was a 65% customer, not 90+%. Though things COULD have changed to the worse (...) since that report came out, I seriously doubt they cound have changed THAT much.


RE: $324 Million Blown
cervezas @ 10/3/2005 7:21:35 PM # Q
This was the supposed motivation for the PSRC/PalmOne split, but we know how well that turned out, with >90% of POS licenses being sold by Palm.

Yeah, well, I think that says more about the problems with Cobalt than it does about the advisability of the split. If PalmSource had delivered Palm OS for Linux at the beginning of last year instead of Cobalt I suspect we'd have seen the Palm OS on a lot more devices by other licensees.

It also says something about the decline of the handheld market, since in the absence of a multi-tasking smartphone OS like Cobalt the market for Palm OS could no longer support Palm, Sony, Handera, Acer, etc. all competing on a shrinking field.

The decision to split had many bad and good points, but I think in the next few years it will finally start to be seen as the right move. The wild bidding race for PalmSouce is the first hint of that vindication by the market.

David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: $324 Million Blown
sr4 @ 10/3/2005 7:25:40 PM # Q
Its definitely >90% of licenses sold.

Canalys numbers for PalmOne Q2 2005

http://blogs.zdnet.com/ITFacts/?p=8586

http://blogs.zdnet.com/ITFacts/?p=8569

Palm devices sold Q2 2005
1,057,420
PalmSource Licenses sold Q2 2005
1,157,720

Thats 91.3% of POS sales being to P1 in Q2 2005. Its obvious they make a lot of their revenue a) from the sale of their name and b) from mandatory license fees from companies who are not shipping any devices (e.g. Sony).

This means there is no big current Asian market for PalmOS either.

Surur

RE: $324 Million Blown
cervezas @ 10/3/2005 7:38:40 PM # Q
there is no big current Asian market for PalmOS either.

Yet! Have you noticed that ACCESS's largest institutional shareholder is NTT DoCoMo?

David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: $324 Million Blown
sr4 @ 10/3/2005 7:40:28 PM # Q

The POS market began declining well before the split, and has accelerated ever since. Linux is not some magic powder that will make everything wonderful. Why has the Zaurus line, which has also been around for many years now, not taken off in any meaningful way. Is POS the only OS that can exploit Linux? If so then Nokia is in for a rude awakening.

Its not just about the underlying OS, its about the support the company gives it, and the clout of the vendor, plus the value add they provide (e.g WMP 10 and PlayforSure in the WM side, or the push e-mail coming) Just providing the OS is not enough.

To put simply, why would a small company chose to make and sell POS devices, and why should a consumer chose to buy such a device. PalmSource and Palm has not adequately answered that question, which is why their market has been shrinking.

Cobalt and even PalmLinux, will not stop the decline of the POS market.

Surur

RE: $324 Million Blown
cervezas @ 10/3/2005 7:41:49 PM # Q
Palm devices sold Q2 2005
1,057,420
PalmSource Licenses sold Q2 2005
1,157,720

It'd be more interesting to see something broader than a single quarter snapshot (anybody have some annual figures?) but the general point is well taken.

David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: $324 Million Blown
sr4 @ 10/3/2005 8:00:57 PM # Q
From those same web pages in q2 2004

Palm devices sold Q2 2004
1,067,880
PalmSource Licenses sold Q2 2004
1,335,810

80% of POS licenses were sold by Palm then. This has only increased as other licensees fell by the way side (Sony, Tapwave, ?Garmin) Its probably closer to 98% these days.

Surur

RE: $324 Million Blown
cervezas @ 10/3/2005 8:10:52 PM # Q
Surer wrote:
Linux is not some magic powder that will make everything wonderful.

Oh now you're just talking crazy. Everyone knows that Linux, when aerosolized into the atmosphere can neutralize global terrorism, improve erectile function and reverse declining Sunday School attendance. What are you, some kind of commie?

Why has the Zaurus line, which has also been around for many years now, not taken off in any meaningful way. Is POS the only OS that can exploit Linux? If so then Nokia is in for a rude awakening.

Good questions. Linux didn't really do a lot for the Zaurus unless you were a Linux geek. In fact, it brought a lot of the problems with desktop Linux over onto the handheld, like being harder to use and not having a lot of good applications written for it.

Where Linux is a powerful proposition is in phones, which can be alternatively much more or much less complex than a PDA. Unlike a lot of operating systems, Linux is very modular, which is why it can power a supercomputer or run as an embedded OS on a computer the size of an RJ-45 ethernet jack (http://linuxdevices.com/news/NS8386088053.html). So it's one of the few options that can scale all the way from cheap feature phones to the most complex 3G smartphones.

The other reason it's very attractive as the core for a phone platform is the openness, which has less to do with it being "free" than it does with giving vendors control over their release dates and hardware choices. These weren't big issues with PDAs but since smartphones take so much longer to bring to market, time-to-market and freedom from vendor lock-in are much more important.

I'm glad you took notice of Nokia's Linux play with Maemo.org and the 770 Internet tablet. Interesting to ask yourself why Nokia, whose Symbian OS dominates 75% of the market and just keeps growing, is bothering with Linux. Maemo isn't a phone platform--yet--but I don't expect it to stay that way for long.

Its not just about the underlying OS, its about the support the company gives it, and the clout of the vendor, plus the value add they provide (e.g WMP 10 and PlayforSure in the WM side, or the push e-mail coming) Just providing the OS is not enough.

Sure, but the "ecosystem" approach of Linux is at least as powerful as Microsoft's monolithic approach when it comes to support. Innovation is faster, bugs are fixed quicker, and support for new hardware comes quicker than with Microsoft. In just a couple of years embedded Linux has come from way behind to a status that is already technically superior to Windows Mobile on several key fronts that make a difference: boot time, memory footprint, and support for open standards.

What mobile Linux lacks to date is a champion analogous to RedHat. MontaVista has been the closest thing but they don't have the recognition, loyal users, applications or user experience of Palm OS. Palm OS has taken a hit in recent years, but it's still in a good position to be the front man for the mobile Linux band.


David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

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