Palm Digital Media Releases List of Best-selling eBooks for 2002 Nearly 10,000 Palm Reader eBooks Now Available

MAYNARD, Mass., Jan. 7 /PRNewswire-FirstCall/ -- An expanded product line, two major distribution partners and dozens of new eBook retailers rendered steady growth for Palm Digital Media, Inc. in 2002 and offer high hopes for the eBook industry, Palm Digital Media Inc. said today. Palm Digital Media, a leading publisher and distributor of eBooks for handheld and desktop computers, is a subsidiary of PalmSource, Inc., the Palm OS(R) subsidiary of Palm, Inc. (Nasdaq: PALM).

"Last year was pivotal for Palm Digital Media as we developed new products and invested in new market opportunities," said Mike Segroves, director of business development at Palm Digital Media and a board member of Open eBook Forum, the eBook industry's non-profit trade and standards organization. "As a result, revenue doubled and we nearly doubled the number of eBooks sold. These are harbingers of a substantial eBook industry."

Palm Digital Media's 2002 product and market investments include:
-- Enhanced Palm Reader eBook applications that run on Palm Powered(TM)
handhelds and PocketPC devices, and Mac and Windows computer
-- Digital rights management server software to enable libraries to offer
easy eBook checkout
-- Palm eBook Studio authoring tool and licensing options, which allow
individuals, businesses, publishing companies and online retailers to
create, distribute and sell Palm Reader eBooks
-- Education Purchase Program to be followed shortly with an eBook
collection for schools.
-- Nearly 10,000 Palm Reader eBook titles from most major U.S. publishing
houses, up from 3,500 from January 2002
-- New channels of distribution. Palm Digital Media started 2002 as the
single online source of Palm Reader eBooks. Today it has opened new
distribution channels in partnership with OverDrive, Inc.'s Content
Reserve B2B digital content network serving more than 400 publishers
worldwide; and Lightning Source, Inc., a leading provider of digital
content management solutions to the book industry.
-- 35 eBook retailers now serving the U.S., United Kingdom, Germany and
France

"In 2002, Simon & Schuster has seen strong growth in eBook sales with especially impressive growth in the Palm Reader format," said Keith Titan, senior director of ePublishing and eCommerce at Simon & Schuster Online. "Expanded distribution is drawing many new Palm Reader customers while a wide selection and a positive experience are creating loyalty in existing customers. The success of Palm Reader shows that consumers will buy eBooks if offered a solid package of selection, mobility, convenience and value. We're expecting continued momentum in the PDA market in 2003 and Palm Digital Media is well-positioned with its new initiatives to lead that charge."

Palm Digital Media also garnered two industry awards in 2002. Last February, it was named Best eBook Publisher by Handheld Computing Magazine. In October PocketPC Magazine awarded the Palm Reader eBook application the title "Best eBook Reader."

Palm Reader runs on Palm Powered handhelds and the portable computing solution Dana from AlphaSmart, Pocket PC handhelds, and Macintosh and Windows desktop and notebook computers.

Palm Digital Media Top 10 Best-selling Fiction Books for 2002
1. "God's Debris" by Scott Adams, Scott Adams
2. "Prey" by Michael Crichton, HarperCollins PerfectBound
3. "Everything's Eventual" by Stephen King, Scribner
4. "Robert Ludlum's The Hades Factor," by Robert Ludlum & Gayle Lynds,
St. Martin's Griffin
5. "The Briar King" by Greg Keyes, Ballantine Books
6. "Riding The Bullet" by Stephen King, Scribers
7. "Spider-Man" by Peter David, Ballantine Books
8. "Star Trek: S.C.E. #5: Interphase, Book 2" by Dayton Ward
& Kevin Dilmore, Pocket Books
9. "The Paris Option" by Robert Ludlum & Gayle Lynds, St. Martin's
Griffin
10. "Last Man Standing" by David Baldacci, Warner Books

Palm Digital Media Top 10 Best-selling Non-fiction Books for 2002
1. New International Version Holy Bible from Zondervan
2. Webster's New World College Dictionary from Hungry Minds
3. "The Procrastinator's Handbook" by Rita Emmett, Walker Publishing Co.
4. Webster's New World Compact School & Office Dictionary from Hungry
Minds
5. "The 7 Habits of Highly Effective" by Stephen R. Covey,
Franklin Covey
6. "The Gentle Art of Verbal Self Defense," by Suzette Haden Elgin,
Barnes & Noble Digital
7. "Penthouse Uncensored III from the Editors of Penthouse Magazine,"
Warner Books
8. Random House Roget's Thesaurus from Random House Reference
9. "Satisfaction Guaranteed" by Rachel Swift, Warner Books
10. "The MultiOrgasmic Couple" by Chia, Chia, Abrams & Abrams,
HarperCollins PerfectBound

More information about Palm Digital Media is available at www.palmdigitalmedia.com.

About PalmSource, Inc.

PalmSource is the company behind the Palm OS, a leading operating system for handhelds and smart phones. Licensed by industry leaders -- including Acer, AlphaSmart, Handera, Handspring, Fossil, Garmin, Kyocera, Palm, Inc., Samsung, Sony and Symbol -- the Palm OS has been shipped on more than 24 million handhelds and smart phones, and given rise to a huge community of users, enterprises, developers and manufacturers, who together make up the Palm Economy. PalmSource is a subsidiary of Palm, Inc. (PALM).

More information about PalmSource, Inc., is available at http://www.palmsource.com . Information about Palm, Inc. is available at http://www.palm.com/aboutpalm .

NOTE: Palm OS and PalmSource are registered trademarks and Palm Powered is a trademark of PalmSource, Inc., a subsidiary of Palm, Inc. Other brands may be trademarks of their respective owners.

SOURCE PalmSource, Inc.