Palm Powered Mobile Computing Devices Continue to Lead in U.S. Retail, Enterprise, and Smartphones, and Are Gaining Share in the European Market, According to Industry Analysts

SUNNYVALE, Calif., Jan. 27 /PRNewswire-FirstCall/ -- PalmSource, Inc. today announced that Palm Powered(TM) handhelds and smartphones strengthened their position in the retail market during the second half of 2002, according to sales figures just released in the United States and Europe. In European retail sales, Palm Powered handhelds -- those that use the Palm operating system -- had strong share gains from a year ago, while in the U.S., Palm Powered handhelds maintained share despite increased competition. Palm Powered handhelds also gained share among enterprise resellers, and manufacturers of Palm Powered smartphones were three of the top six smartphone companies worldwide. PalmSource is the provider of the world's most popular operating system for handhelds and smart phones, and the Palm OS(R) subsidiary of Palm, Inc. (Nasdaq: PALM).

Gaining Share in Europe

According to the October-November 2002 sales report from GfK Marketing Services, retail share in Europe of Palm Powered systems rose as PalmSource's licensees released new products and shipped Palm OS 5, the newest version of the Palm operating system. In Germany, share of Palm Powered mobile devices in October-November increased eight points from a year ago, from 50 percent to 58 percent. In France, share of Palm Powered mobile devices increased 12 points, from 52 percent to 64 percent. In the United Kingdom, share of Palm Powered mobile devices increased by eight points, from 42 percent to 50 percent.

U.S. Retail Share Strong and Stable

During the 2002 holiday season, Palm Powered products faced stiffer competition than ever before as licensees of rival operating systems introduced lower-priced handheld devices and increased their promotional spending. Despite the increased competition, Palm Powered handhelds maintained their historically strong share position in the United States. According to weekly retail sales figures compiled by NPD Intelect in December 2002, Palm Powered devices maintained around 80 percent share, roughly the same share range they held during the December 2001 holiday period.

Leading Share in U.S. Enterprise Resellers

Share of Palm Powered mobile devices is also strong among U.S. commercial resellers, companies that sell handhelds direct to corporations, according to NPD Intelect. During the third quarter of 2002, the most recent information available, Palm Powered handhelds had 72.9 percent share, up from 56.7 percent in the same quarter the year before.

Leader in U.S. Smart Phones

According to International Data Corporation's tracking of converged mobile devices -- smart phones that combine handheld and mobile phone capabilities -- Palm Powered smart phones had 89 percent share in the US during the third quarter of 2002, the most recent data available. Worldwide, three of the top six smart phone vendors' products were Palm Powered -- Handspring, Kyocera, and Samsung.

"Users continue to prefer Palm Powered products for value, usability, reliability and the enormous range of third party applications, content and accessories that are available," said David Nagel, president and CEO of PalmSource. "This sales data, and the fact that over 25 million Palm Powered devices have now been sold, underlines the ever-increasing popularity of the Palm operating system."

The second-half, 2002 share gains were driven by innovative new mobile computing products from licensees such as:

-- Alphasmart, with its Dana, a durable and low-priced laptop computer
replacement for students;
-- Handspring, with the Treo 300, the first Palm Powered communicator to
include a bright color screen with a full thumb keyboard;
-- Kyocera, with its tiny-but-powerful 5135 Palm Powered flip-phone;
-- Palm, Inc.'s hardware division, with its sophisticated new Tungsten T
and Tungsten W business products and low-cost Zire for entry-level
handheld users;
-- Samsung, with its sleek i330 smart phone that combines Web browsing,
handheld, and phone functions; and
-- Sony, with its Clie NX 70v, which includes a thumb keyboard and video
camera.

Additional new Palm Powered products that will ship in the first half of 2003 include Fossil's Wrist PDA with Palm OS, Garmin's iQue 3600 GPS-enabled handheld, the Legend Pam168 Chinese-language handheld, and the Sony Clie NZ90 with a two megapixel camera and the highest resolution, feature-rich multimedia capabilities ever in a handheld. Other new devices are in development by Group Sense Limited and HuneTec. The new products, along with the existing lineup of award-winning devices from Acer, HandEra and Symbol, greatly increase the selection of features available to Palm Powered customers. Combined with more than 16,000 Palm OS software programs, the largest selection of software for any handheld, these devices take Palm OS far beyond its roots as a personal information management tool, helping people to be more in touch, as well as productive and organized in their business and personal lives.

About PalmSource

PalmSource is the company behind Palm OS, the world's most popular operating system for handhelds and smart phones. Licensed by industry leaders -- including Acer, AlphaSmart, ARM, ATI, Fossil, Garmin, GSL, Handera, Handspring, HuneTec, Intel, Kyocera, Legend, MediaQ, Motorola, Palm, Samsung, Sony, Symbol, Texas Instruments -- Palm OS has been shipped on more than 25 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's new headquarters are located at 1240 Crossman Ave. in Sunnyvale, Calif. PalmSource is a subsidiary of Palm, Inc. (PALM). More information about PalmSource, Inc., is available at www.palmsource.com. Information about Palm, Inc. is available at www.palm.com/aboutpalm.

NOTE: PalmSource and Palm OS are registered trademarks and Palm Powered is a trademark of PalmSource, Inc., a wholly owned subsidiary of Palm, Inc.

SOURCE PalmSource, Inc.