PalmSource today entered an agreement for the acquisition of China MobileSoft Limited (CMS), a mobile phone software company with a large focus on Linux-based devices. The agreement says that PalmSource will issue just over 1.5 million shares of PalmSource common stock, by February 28, 2005, in exchange for the outstanding equity and rights to acquire CMS. The acquisition will give PalmSource extended software products to offer devices at all price points around the globe.

One of the products CMS has developed is mLinux, a very small real-time Linux kernel for mobile devices with support for a vast amount of hardware and networking options. mFone is also another of their leading products, with GUI interface, network protocols and many end-user applications for web browsing, PIM, email, SMS, MMS, MP3 players and games.

“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 CEO of PalmSource, Inc. “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.”