LG Electronics Co. Ltd., PalmSource Inc., SavaJe Technologies and China MobileSoft Ltd. all made waves on the operating-system front last week, announcements that further fractured an already complicated market.
Indeed, as the mobile-phone industry continues to skyrocket, software vendors from all sectors are looking to take advantage of the situation. Microsoft Corp., Symbian, PalmSource, Openwave Systems Inc. and a variety of other players are jostling to provide the software and user-interface technology to power the multibillion-dollar mobile-phone market. And each is taking a slightly different strategy.
First up, PalmSource announced plans to acquire Chinese software vendor China MobileSoft Ltd. in an all-stock transaction valued at around $23 million. PalmSource’s stock fell slightly after its announcement to about $14.15 per share.
Under the terms of the transaction, PalmSource will issue about 1.6 million shares to acquire CMS. The deal is subject to conditions including CMS shareholder approval. PalmSource said it expects to close the deal in February.
PalmSource said the acquisition would give it a foothold in the Chinese market. CMS applications ship in more than 30 phone models, and the company operates a major research and development center and sales and marketing team in the country. PalmSource also said the move will allow it to target a wider range of phones. The company’s OS currently powers high-end phones like the PalmOne Treo 650. Phone software vendors like Openwave and others already target mid-range phones with lightweight platforms-a position that expands sales opportunities beyond the nascent smart-phone market.
More importantly, PalmSource said the acquisition would give it access to CMS’ Linux technology. The operating-system vendor said it plans to continue selling its Palm OS Garnet and Palm OS Cobalt platforms to handset manufacturers, but would also build a version of the Palm OS operating on Linux technology. PalmSource said the move would combine its large Palm OS development community with the flexibility of Linux and would entice a new range of customers.
Linux is an open-source technology that has gained a significant following with both computer manufacturers as well as consumer electronics vendors. Linux also has become a notable movement within the wireless industry, appealing to those companies that want more control over the look and feel of their operating systems. Motorola Inc. builds a variety of phones using its own blend of Java and Linux, and a variety of Asian manufacturers have announced major support for the Linux platform. Indeed, Japanese wireless giant NTT DoCoMo Inc. selected Linux and Symbian as its two standard phone platforms. The primary Linux software vendor in the wireless world is MontaVista Software.
However, some have voiced opposition to the Linux platform. Microsoft Corp. and Nokia Corp. officials each have separately stated that the Linux platform suffered from concerns over patent and copyright snarls. Both Nokia and Microsoft sell their own mobile-phone OSs.
“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 is known for to all mobile phones,” said David Nagel, president and chief executive officer of PalmSource. “We believe the combination of PalmSource, CMS and Linux gives us the technological and market-critical mass to compete with even the biggest proprietary operating-system companies.”
PalmSource, spun out of personal digital assistant company PalmOne Inc., has shipped its OS in a total of 36 million PDAs and smart phones. The company counts Aceeca, AlphaSmart, Fossil, Garmin, GSL, Kyocera, Lenovo, PalmOne, QTech, Samsung, Sony, Symbol Technologies and Tapwave as customers.
Just as PalmSource announced its new Linux plans, phone maker LG said it will use a Java-based operating system from Java vendor SavaJe.
“LGE sees SavaJe OS as the technology to deliver products with a new innovative generation of user experiences, enabling operators to accelerate their revenue streams,” said Woo-Young Kwak, vice president and research fellow for LG’s Mobile Handset R&D Center.
LG said it plans to use the operating system in “a range” of 2.5- and third-generation devices and promised to provide more information during the 3GSM World Congress trade show in February. An LG spokesperson did not immediately provide details on the partnership.
SavaJe offers an operating system based solely on Sun Microsystems Inc.’s Java platform. The company said the OS supports full HTML Web browsing, full-motion video, MP3 functions and over-the-air updating technology. Launched in 2002, SavaJe has kept a relatively low profile until now.
For LG, the move is notable as the company has largely stayed out of the operating system battle. Motorola has voiced major support for Microsoft, while Nokia has thrown its weight behind Symbian. Samsung has partnerships with both Microsoft and Symbian. LG has to date stayed above the fray. Its new deal with SavaJe could indicate LG’s intent to gain favor with operators in Europe. Vodafone Group plc, T-Mobile International and Orange plc have each made strategic investments in SavaJe. SavaJe promotes its OS as fully configurable to operator’s software requests.
