Palm completes split of hardware, software units

Palm Inc. has spun off its software business in an effort to encourage more manufacturers to license its Palm OS operating system for PDAs (personal digital assistants).

The software development and licensing business, called Palm OS, will now be completely separate from the hardware business, Solutions Group, Palm said in a statement Monday.

Palm OS will become a wholly-owned subsidiary of Palm Inc., and David Nagel has been named as the subsidiary's president and chief executive officer, said Franck Gaget, Palm's senior manager for European marketing. Nagel was previously chief technology officer for AT&T Corp. and president of AT&T Labs, and has been on Palm's board since September.

While the two companies, Palm OS and Solutions Group, will share departments such as finance and human resources, they will report results separately, Gaget said.

The split will clear up any possible conflicts of interest between the hardware and software divisions, Gaget said. The Solutions Group will become a licensee of Palm OS and will have the same rights and obligations as any other licensee, he said.

According to Palm, over 20 million devices using its OS have been sold worldwide. Over 80 percent of handhelds sold in the U.S. in November were based on the OS, the company claims.

The operating system is used in Palm's own PDAs, and those of Handspring Inc. and Sony Corp.

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