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U.S.-based PalmSource Inc., developer of the Palm operating system used in handheld devices like personal digital assistants, Monday said it sees huge potential in the wireless market.

"Smartphones overall and wireless devices in general are an enormous potential," David Nagel, president and chief executive of PalmSource, said at a media briefing.
"Increasingly, we are turning the bulk of our attention to the...wireless market," Nagel said.

Citing data from research firms, he said the worldwide market for PDAs and handheld devices is around 12 million to 15 million units a year, a fraction of the 450 million-unit cellphone market.

But contrary to some market speculation that smartphones will destroy the PDA market, Nagel believes a variety of mobile devices will co-exist.

Nagel also said the company is in talks with network operators in China, but declined to specify names.

PalmSource, which was spun off from palmOne Inc. (PLMO) in October, is looking to establish a research and development facility in China, hopefully in the coming year, Nagel said.

The company is increasingly localizing its platform to meet the requirements of the Chinese market, he said.

The CEO was speaking to reporters ahead of a conference to launch the P100 and P300 Palm-powered handhelds from leading Chinese information technology group Lenovo, formerly Legend Group Ltd. (0992.HK).

The U.S. firm also said it has partnered Founder Technology Group, another major tech company in China, to distribute Foundertech-branded Palm-powered devices in the country.

The P100 and P300 are the first Palm products that have been fully localized using the Palm OS 5 simplified Chinese edition.

Liu Junyan, general manager of Lenovo's digital mobile business, told reporters the company hopes next year to sell a combined 100,000 units of the P100 and P300, which are aimed at English-language learners.

The company is considering pricing the entry-level P100 around 1,000-2,000 yuan ($1=CNY8.28) per unit and the P300, which comes with a color screen, around CNY2,000-CNY3,000, said Liu.

Foundertech said its first Palm-powered product for the Chinese market would be an eBook which can be customized with other Palm OS applications.

"In future, we will have a full range of products that use Palm OS," said Cui Liyong, director of Foundertech's research and development center.

Cui said Foundertech would launch its eBook and possibly other Palm-powered devices around May next year.

Company Web sites: http://www.palmsource.com, www.lenovo.com, www.foundertech.com

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