PalmSource said it is looking for a permanent successor and Nagel will remain in an advisory role until the middle of July. In the meantime, Patrick McVeigh, who is currently senior vice president for worldwide licensing, has been named interim CEO.
PalmSource was formed when Palm split its hardware and software operations in 1993. After an IPO at $40 a share, the price has steadily fallen and currently stands at $8.93, valuing the company at $149m. In its third quarter to March 31, it lost $721,000 on revenue 20.3% lower at $17.2m. It is likely to end the year with revenue flat at about $71m.
The company’s prospects have not been helped by constant rumors that its major customer PalmOne is set to throw in its lot with Microsoft and adopt Windows CE. In November, US-based financial analyst Needham & Co released a research note suggesting it virtually certain that PalmOne intends to use Microsoft’s Windows Mobile platform in a future device.
PalmSource made a move to strengthen its position in the mobile handset marker by paying $22.3m last December for China MobileSoft, which developed its own embedded Linux kernel. PalmSource plans to combine this with its own application and user interface capabilities to create a consistent software platform for multiple segments of the mobile handset market.
With smartphones increasingly taking over from PDAs, PalmSource has been squeezed between CE and Symbian at the higher end of the market, and Linux, which tends to be favored by new entrants at the low end.
