Palm is a leader in the market for handheld devices, sometimes called personal digital assistants (PDAs). It had licensed its software to Handspring, which became a strong rival in the market.

"These two bold moves will serve as a powerful catalyst to transform the landscape of the handheld industry," said Eric Benhamou, chairman and chief executive officer and chairman of PalmSource, which are based in Milpitas, California.

"The strategic choice of merging Handspring and the Palm Solutions Group of Palm will create the broadest portfolio and the most-experienced leadership team in the industry, fully capable of delivering value to customers, partners and shareholders. And the spin-off of PalmSource will help grow the Palm Economy, attract additional licensees and unlock shareholder value."

SPACE.WIRE