PalmSource CEO: Linux is the future

CANNES -- As competition intensifies in the market for smart phone OSes (operating systems), PalmSource is looking at ways to carve out a piece of market share. Earlier this month, the company acquired China MobileSoft (CMS) in a move aimed not only at gaining additional smart phone expertise but also Linux know-how. At the 3GSM World Congress in Cannes, PalmSource unveiled four new applications that draw on its recent CMS acquisition. IDG News Service interviewed David Nagel, president and chief executive officer of PalmSource, shortly before the start of the wireless conference and exhibition, which runs through Thursday.

IDGNS: You appear to be making some significant shifts in your strategy, moving beyond PDAs to smart phones and even Linux. Why?

Nagel: Two years ago, we began to see the real growth opportunities in the handheld-computing market were shifting from stand-alone devices, like the original Palm Pilot, to devices that combine features of the handheld computer with communicator devices, whether it's a smart phone or a BlackBerry-type device. We began refocusing our development efforts to serve that market, which we saw as the future.

Last summer, we brought out a product called Cobalt, which was our smart phone operating system. We have a number of products in development based on Cobalt.

IDGNS: And Linux?

Before I talk about Linux let me talk about China first. At about the same time we began our smart phone shift, we began to look at China, which we view as a market with enormous growth potential, particularly in the smart phone or communicator segment. There are 320 million subscribers in China today. It's the largest mobile market in the world, adding roughly 5 million new subscribers every month.

We also realized that to succeed in China, we will need to have more Chinese development and customer support presence. We considered either building our own development group or acquiring a company. Initially, we thought we would build a development group. But we soon realized that this would be difficult and would take time. So we looked around for a company that already had a capability there. That search led us to China MobileSoft. We closed that acquisition (two weeks ago).

IDGNS: Why CMS? Did it have something PalmSource lacked, like Linux expertise?

Nagel: CMS has three kinds of products. The first are wireless applications, like multimedia messaging, WAP browsers, e-mail and games. These applications are typically shipped with smart phones, which combine the capability of a handheld computer with a phone. They are also in feature phones. These phones are positioned in the middle between high-end smart phones and low-end basic phones, which offer telephony and messaging. Feature phones are like smart phones with all kinds of applications but they are closed devices. You buy them as an appliance. They come with preinstalled applications, which you can't load, and they have a proprietary operating system.

The second type of product in the CMS portfolio is a feature phone operating system. The feature phone market today is actually much larger than the smart phone market. Of the some 600 million mobile phones sold worldwide per year, several hundred million are feature phones. China is the largest market for feature phones.