Press Release

PalmSource Welcomes Fossil Wrist PDA With Palm OS

Next Generation Palm Powered Watch Delivers Palm OS Functionality in Compact Wearable Form Factor

SUNNYVALE, Calif., January 5, 2005 – PalmSource, Inc. (NASDAQ: PSRC), provider of Palm OS®, a leading operating system powering next generation mobile devices and smartphones today welcomed the Wrist PDA® with Palm OS® from Fossil, the next generation Palm Powered™ wrist watch. Available under the ABACUS and FOSSIL brands, the Wrist PDA with Palm OS combines all of the benefits Palm OS has to offer with the portability and convenience of a wrist watch. The Wrist PDA with Palm OS from Fossil builds momentum for the Palm OS platform in new markets of mobile products; encourages licensees to drive innovation in emerging mobile device categories; and provides business opportunities for the Palm OS software developer community.

"The Palm OS platform offers our licensees the flexibility to create innovative and diverse mobile products like the Fossil Wrist PDA with Palm OS that meet the individual needs of mobile users. Easily customized with the thousands of Palm OS software titles available today, we believe the Fossil Wrist PDA with Palm OS provides a powerful and intuitive tool which blends fashion and technology by providing consumers immediate personal and professional information at the flick of the wrist," said David Nagel, president and chief executive officer for PalmSource, Inc. "From smartphones to wrist watches, Palm Powered products run the gamut in form factor and functionality, offering the widest selection for users to choose the device that best fits their lifestyle."

"Leveraging the industry–leading Palm OS has enabled Fossil to successfully bring to market the first truly wearable Palm Powered mobile product of its kind," said Frank Romero, Director of Technology Watch Products for Fossil, Inc. "We look forward to our continued collaboration with PalmSource to provide Palm Powered users with cutting–edge wearable mobile products."

The FOSSIL and ABACUS branded Wrist PDA features:

  • Palm OS® version 4.1
  • 8 MB of memory (approx. 7.7 MB available to the user)
  • 160 x 160 pixel LCD with backlight
  • Touch screen input
  • 3–way Rocker and Back button for one–handed navigation
  • Customizable watch faces
  • USB interface supports Windows and Mac
  • IRDA infrared communication port
  • Lithium–ion rechargeable battery (lasts approximately three to four days between charges)

The new Wrist PDA is available in two different brands, FOSSIL and ABACUS, and will hit store shelves on January 6th. The Fossil branded product (FX2008) can be found at Fossil stores nationwide or at www.Fossil.com. The FOSSIL Wrist PDA is priced at a MSRP of $249.00 USD.

The ABACUS brand Wrist PDA® product (AU5005) will be available exclusively through a direct sales and marketing partner, Tiger Direct. Product information is available at www.AbacusWatches.com and the product can be purchased at www.TigerDirect.com. The ABACUS Wrist PDA is priced at a MSRP of $199.00 USD.

About PalmSource
PalmSource, Inc. is the company behind Palm OS®, a leading operating system powering mobile information devices. Approximately 37 million Palm Powered handhelds and smartphones have been sold to date worldwide. Industry leaders Aceeca, AlphaSmart, Fossil, Garmin, GSL, Kyocera, Lenovo, palmOne, QTech, 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.

Copyright © 2004, PalmSource, Inc., PalmSource, Palm Powered and Palm OS are trademarks or registered trademarks of PalmSource, Inc. or its affiliate in the United States, France, Germany, Japan, the United Kingdom, and other countries. All other brands, product names, company names, trademarks and service marks are the properties of their respective owners. All rights reserved.

About Fossil Inc.
Fossil is a design, development, marketing and distribution company that specializes in consumer products predicated on fashion and value. The company's principal offerings include an extensive line of fashion watches sold under the company's proprietary and licensed brands. The company also offers complementary lines of small leather goods, belts, handbags, sunglasses, jewelry and apparel. The company's products are sold in department stores and specialty retail stores in over 90 countries around the world, in addition to the company's e–commerce website at www.fossil.com. Certain product, press release and SEC filing information concerning the Company is available at the website.

Safe Harbor Statement

CAUTIONARY NOTE REGARDING 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 the Wrist PDA® and Palm OS®; new mobile product markets; and the Palm OS developer community. 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 the Wrist PDA to provide the anticipated results and benefits, to operate without error and to meet the individual needs of mobile users; continued acceptance of Palm OS by our licensees and software developers; the ability of our licensees to innovate in emerging mobile device categories in a timely manner; our ability to grow and maintain our software developer community; our ability and the ability of our licensees to compete with existing and new competitors; our ability to benefit from any growth in the smart mobile device markets; 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 Annual Report on Form 10–K for the period ended May 28, 2004 and our Quarterly Report on Form 10–Q for the period ended August 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.

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