Press Release

Palm OS Leads the U.S. Smartphone Market

Palm Powered Smartphone U.S. Market Share Exceeds Microsoft and Symbian Series 60 Combined

SUNNYVALE, Calif., May 11, 2004 — PalmSource, Inc. (NASDAQ: PSRC) provider of Palm OS™, a leading operating system powering next generation mobile devices and smartphones, today announced Palm OS is the leader in the U.S. smartphone market for the third straight month. Based on data released by the NPD Group¹, a retail sales tracking firm, U.S. market share for Palm Powered™ smartphones in March 2004 exceeded Microsoft and Symbian Series 60 market share combined.

NPD's data on the U.S. smartphone market gave Palm OS a 47 percent market share, an increase of 13 points from January figures. Microsoft (the combination of Pocket PC Phone Edition and Microsoft Smartphone) and Symbian Series 60 tied with 20 percent market share each. Rising sales of the Treo™ 600 smartphone from palmOne, Inc. and continued success of Kyocera and Samsung Palm Powered smartphones boosted Palm OS market share in March 2004.

"The figures from NPD confirm that the Palm OS is a great platform for smartphones," said Michael Mace, chief competitive officer at PalmSource, Inc. "We believe the power and flexibility of Palm OS enables licensees to create mobile data products with advanced features that drive end-user demand and deliver unsurpassed ease-of-use."

About the NPD Group
The NPD Group tracks sales of smartphones - defined as phones with an operating system - through a combination of domestic retail sales reports and weekly surveys of approximately 35,000 U.S. consumers. Since 1967, The NPD Group has provided reliable and comprehensive sales and marketing information for a wide range of industries. NPD provides critical knowledge on what is selling, where, to whom and why. Today more than 1,300 manufacturers and retailers rely on NPD to help them better understand their customers, product categories, distribution channels and the competition.

About PalmSource
PalmSource, Inc. is the company behind Palm OS, a leading operating system powering mobile information devices. Approximately 33 million Palm Powered handhelds and smartphones have been sold to date worldwide. Industry leaders Aceeca, AlphaSmart, Fossil, Foundertech, Garmin, GSL, HuneTec, Kyocera, Lenovo, palmOne, PerComm, Samsung, Sony, Symbol Technologies and Tapwave license Palm OS to create diverse mobile devices that meet unique customer needs. Palm OS has given rise to a large community of users, enterprises, developers and manufacturers, who together make up the Palm Powered Economy. More information about PalmSource is available at www.palmsource.com, www.palmsource.co.uk, www.palmsource.fr, www.palmsource.de and www.palmsource.com.cn.

Palm, Palm OS and PalmSource, palmOne and Palm Powered are trademarks of, Palm Trademark Holding Company, LLC. Treo is among the trademarks or registered trademarks owned by or licensed to palmOne, Inc. or its subsidiaries.

Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements include, without limitation, statements related to the features, functions and benefits of Palm OS and Palm OS licensees' products. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include, without limitation, the ability of Palm OS to enable the creation of mobile data products with advanced features that meet end-user demands; the ability of Palm OS to maintain its flexibility and ease-of-use; the ability of Palm OS licensee to develop and bring to market mobile data products in a timely manner; acceptance of Palm OS licensee's mobile data products by end-users; and the general economic conditions in the U.S. and abroad and other risks and uncertainties contained in our public announcements, reports to stockholders and other documents filed with and furnished to the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the period ended August 29, 2003, November 28, 2003 and February 27, 2004. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.

¹ NPD reports sales of both Pocket PC Phone Edition and Microsoft Smartphone together as one single number.