Palm Buys Back Its OS for $44 Million
Palm is buying — or rather, buying back — what it used to own. This week, the Sunnyvale, California, firm announced that it purchased a perpetual license to the Palm Garnet operating system from Access Systems Americas. Garnet is used in all of Palm’s current handhelds and smartphones, including its popular Treo line.
Palm will pay Access $44 million for the license, which lets Palm edit the source code in any way it likes and keep all rights to its edits and upgrades. But Palm won’t pay anything until the third quarter of 2007. The single payment “eliminates the requirement for Palm to pay Access continuing royalties of tens of millions of dollars over the coming years,” according to a written statement by Palm.
The license also gives Palm the right to use Garnet in any Palm product, either in whole or in part, whether the product is a handheld, a smartphone, or even a new class of device.
History Lesson
Ten years ago Palm released its Pilot 1000 and 5000 models and unleashed a wave of handheld computing, just in time for the start of the Internet boom. But by 2002, Palm had spun its widely praised OS into a separate firm, PalmSource, which foundered and was later purchased by Access.
No doubt to Palm’s discontent, Access left Palm to run its handhelds with slowly aging software at the precise time when Windows-powered models and the tough-to-topple BlackBerry were taking chunks of its market share. Hence the announcement, which gives Palm rights to software it used to own, so it can pick up where it left off in 2002.
It’s not the first time that Palm repurchased a key asset. When the Sunnyvale firm launched PalmSource, it changed its own name to PalmOne, a decision it seemed to regret when it later paid millions…
