PalmSource Announces New “Tier 1” Licensee Coming

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As part of their fiscal fourth quarter conference call today, PalmSource announced a 16% reduction in staff, a smaller loss than the same period a year ago, and a brand new licensee coming to the table. Of course the last part is the most interesting and could provide great momentum as PalmSource evolves into a new entity.

The financials get a little convoluted, so let’s look at numbers we can all grasp. Palm OS licensees reported shipping a total of approximately 1.1 million units during the quarter, of which 37 percent were Smartphones and 63 percent were PDA’s and other mobile handheld devices. This compares to a total of approximately 1.4 million units shipped in the fourth quarter of fiscal 2004, of which 18 percent were Smartphones and 82 percent were PDA’s and other mobile handheld devices. 300,000 fewer units were shipped and the number of total Smartphones shipped doubled, even in the face of a overall decline. Obviously the standard PDA is taking the largest hit, evidenced further by the preponderance of new units from manufacturers other than palmOne having phone capabilities.  
On this point, Patrick McVeigh, interim CEO, said, “While we still face significant challenges over the next several quarters, we continue to move forward with our development efforts in the broader mobile phone market.” He went on to say, “We are committed to our transition to Linux-based platforms that deliver a great user experience.”

Beyond that, McVeigh indicated there will be a new licensee announcement soon. He indicated that the deal is done and it’s a top 5 global handset manufacturer. While I don’t have an official top 5 chart, Nokia is #1 with Motorola, SonyEricsson, Samsung, LG, Siemens and Sanyo in the mix. Of course Samsung is already a Palm OS licensee. Any of the others, especially Nokia, Motorola or SonyEricsson, would be huge news.

Could Sony be getting back into the game after a long layoff, via the SonyEricsson brand? Could Nokia be looking to push into mainstream Smartphones? Is Motorola frustrated by their many Windows Mobile based failures? Or are we mis-interpreting this and he meant a ODM like PiTech or GSPDA? An argument could be made for any of them, we’ll just have to hold tight to see who it is and what sort of products come to market.



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