Palm (formerly PalmOne) lost a bidding war to re-acquire its software spinoff, PalmSource, Business Week reports. Palm was PalmSource's “only significant licensee” for Palm OS, but interest in PalmSource from mobile phone software vendors drove the price too high for Palm, the publication reports.

PalmSource was acquired two weeks ago by Japan-based mobile phone software vendor Access. Palm, meanwhile, plans to license Microsoft's mobile OSes for some of its future products, including a forthcoming edition of its popular Treo smartphone.

Rumors that PalmSource would be reacquired by Palm caused its stock to spike in late August. However, Palm's strategic shift toward Linux last December made it attractive to companies selling mobile phone software, a larger market than that for PDA hardware.

According to BusinessWeek, Palm CEO Ed Colligan wrote an email to employees stating, “There was a point beyond which we didn't think it made sense.”

The winning bidder, Access, is best known for its NetFront browser for mobile phones and set-top boxes. The NetFront browser surpassed a million shipments in 2003, the company claimed.

Access also offers a complete NetFront application suite for embedded Linux, as well as a UI SDK and a lightweight Java virtual machine that support Linux.

PalmSource last month announced a partnership with MontaVista on mobile phone software, and Access is a charter member of MontaVista's Mobilinux ecosystem.

Embedded Linux powered 14 percent of smartphones shipped in Q105, according to Gartner, while Windows powered 4.5 percent. Linux smartphone shipments grew significantly in Japan, the research firm reported.

 
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