Access buys PalmSource for $324m

Access has bought PalmSource for $324 million.

The Japanese developer of embedded Web browsers for mobiles will pay $18.50 a sharefor the developer of the popular Palm operating system - an 83 percent premium.

Access is best known for its NetFront Web browser, which is available in several editions for mobile phones and information appliances including Palm OS, Symbian, Linux, Windows Mobile/Pocket PC and Brew. The company estimates that its browser is in use in over 180 million devices around the world.

Access said it hopes the acquisition will strengthen its hand in the mobile content delivery business and in Internet access software for mobile devices.

PalmSource was originally the software division of PDA-maker Palm but was spun off in October 2003. A year after gaining its independence, the company decided that Linux was the best bet for its future survival and announced plans to move its operating system to the Linux kernel.

Earlier this month, PalmSource formed a partnership with major mobile Linux OS provider MontaVista as part of its Linux efforts.

One analyst said the acquisition had come as a surprise. Dean Bubley of Disruptive said that it also made strategic sense however. "Access' main product is its NetFront browser, which has had great success in Japan but outside its traction has been patchy, restricted mainly to i-Mode handsets.

"Access' move seems to be less about PalmSource's smartphone and PDA heritage, and more by its newer direction as a developer of Linux-based handset platforms. The main questionmarks over the acquisition are however, how it may impact Access' relationships with other mobile phone OS and platform suppliers, and what may happen in the transition period before PalmSource's Linux platform is fully available.

"There is also an open question of what this means for PalmSource's legion of loyal developers."