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PalmSource Revenue Drops 21%

Sunnyvale, Calif. — PalmSource, a developer of software for mobile phones and other mobile devices, reported total revenue for its fiscal third quarter of $17.2 million, down 21 percent from the $21.6 million recorded in the year-ago period.

At the same time, the company moved into the red, recording a third-quarter net loss of $721,000, compared with net income of $597,000 in the same three months a year earlier. Gross margin for the quarter, ended Feb. 28, was flat, at 93 percent.

Consolidated results for the third quarter included one month of financial results for China MobileSoft, a company acquired in late January.

PalmSource licensees reported shipping a total of about 1.4 million units in the three months, of which 23 percent were smartphones and 77 percent were PDAs and other mobile handheld devices. This compares with a total of about 2 million units shipped in the third quarter of the previous fiscal year, of which 12 percent were smartphones and 88 percent were PDAs and other mobile handheld devices.

For the 9 months, PalmSource revenue dropped to $54.6 million, about flat with a year-ago $55.5 million.

Net income for the 9 months reached $1.1 million, moving into the black, compared with the $12.3 million net loss recorded in the same period a year earlier.

PalmSource’s acquisition of China MobileSoft allows a foothold in the Chinese market with voice, feature and smartphone products, said the company. The Chinese acquisition provides a low-cost, localized development and support capability, as well as the technology base to improve competitiveness of PalmSource software products internationally, said the company.