SAN JOSE, Calif., PalmSource Developer Conference, Feb. 10, 2004 — PalmSource, Inc. (NASDAQ: PSRC) provider of Palm OS®, a leading operating system powering next generation mobile devices and smartphones, today introduced Palm OS Cobalt, a new enhanced version of the operating system that is designed to enable the creation of new categories of devices for the communications, enterprise, education and entertainment markets. PalmSource also announced Palm OS Garnet, an enhanced version of the popular Palm OS 5, designed to accelerate the development of Palm Powered™ handhelds and smartphones. The two versions of the operating system, Palm OS Cobalt and Palm OS Garnet, offer the Palm Powered platform new functionality without compromising the flexibility, ease-of-use and compatibility that are the hallmarks of Palm Powered mobile devices.

"Wireless technologies and services have evolved to where enterprises deploying mobile solutions are increasingly relying on connected solutions to take advantage of the benefits that come from real-time access to data," said Kevin Burden, program manager of IDC's Mobile Devices research service. "Palm OS Cobalt's emphasis on managing the security implications of network connectivity, while continuing to provide a scaleable platform that maintains the Palm OS tradition of flexibility and ease of use will help the Palm OS keep pace with the demands of enterprise IT."

"We believe Palm OS Cobalt will pave the way for new categories of smart mobile devices and solutions, for the communications, enterprise, education and entertainment markets," said David Nagel, president and CEO of PalmSource, Inc. "We have also reinforced our commitment to optimize our platform for wireless devices, by including wireless capabilities in both Palm OS Cobalt and Palm OS Garnet, designed to enable a wide range of smartphones and other wireless products."

Formerly known as Palm OS 6, Palm OS Cobalt is a complete rewrite of Palm OS designed to maintain ease of use and software compatibility while creating a foundation for next-generation Palm Powered devices and solutions tailored to the growing needs of the communications, enterprise, education and entertainment markets. Palm OS Cobalt improves compatibility with Microsoft Windows, while offering advanced features including:

• Multitasking, multithreading;
• Memory protection;
• Support for more memory and larger screens;
• Industry standards-based security;
• Extensible communication and multimedia frameworks capable of handling multiple connections simultaneously;

In addition, Palm OS Cobalt provides rich graphics and multimedia features derived from the Be OS, which Palm®, Inc. acquired in 2001.

Also announced today, Palm OS Garnet builds on the solid foundation of Palm OS 5 and incorporates new built-in technical features such as standard support for a broad range of screen resolutions, dynamic input area, improved network communication, and Bluetooth. Palm OS Garnet is designed to enable licensees to more efficiently bring Palm Powered handhelds and smartphones to market and reduce development costs.

"Palm OS Cobalt delivers on its promise to bring advanced multimedia and enterprise functionality to the platform, extending its reach to new markets," said Masanobu Yoshida, Senior General Manager, Personal Communication Development Division, IT& Mobile Solutions Network Company for Sony Corporation "PalmSource has maintained its high standards of compatibility, flexibility, data protection and ease-of-use."

PalmSource Offers New Software Development Tools
PalmSource also introduced new software development tools for Palm OS Cobalt and Palm OS Garnet. A technical preview of the new Palm OS Developer Suíte is now available to Palm OS developers in the Resource Pavilion in the Developer Zone atwww.palmsource.com/developers. The new Palm OS Developer Suite is based on the industry-standard Eclipse environment, an open-source, Integrated Development Environment (IDE) originally developed by IBM that supports software development in a variety of languages, including C, C++, Java and COBOL. The Palm OS Developer Suite provides one set of tools designed to assist Palm OS developers to create and bring to market higher performance wireless, entertainment and enterprise-grade applications that take advantage of the advanced functionality of Palm Powered smart mobile devices. PalmSource and its partners now offer a wide variety of development tools, including Metrowerks CodeWarrior, the Eclipse environment, Borland's tool suite and the Microsoft NET compatible tools from AppForge.

About Palm OS Cobalt

• Multithreaded, Multitasking — Palm OS Cobalt is designed to enable multiple applications to run simultaneously, so users gain more productivity and a better user experience. For example, a user can listen to MP3 files, book a calendar appointment and take an incoming phone call. A background-processing model is designed to reduce most memory problems commonly associated with multitasking in mobile devices.

• Expanded, Protected Memory Architecture— With support for up to 256MB of RAM and 256MB of ROM, Palm OS Cobalt paves the way for the creation of more sophisticated communications, enterprise, education and entertainment applications. In addition, the new protected memory architecture is designed to protect against applications "hanging" the system or causing crashes.

• System Wide Security Architecture — Palm OS Cobalt provides built-in encryption, authentication and authorization frameworks for securing applications such as enterprise and e-commerce solutions, browsers, wireless email and connections to corporate networks such as VPN. The extensible structure also offers software developers advanced, industry-standard security services and cryptography.

• New Pluggable Communications Design — The modular, flexible, industry-standard STREAMS-based framework is designed to offer a simple way for licensees and software developers to add communications support for a wide variety of networking and communications protocols. Palm OS Cobalt is designed to supports multiple simultaneous communication sessions on various wireless networks, such as downloading WiFi delivered data while receiving a phone call.

• Extensible Multimedia Framework — Palm OS Cobalt is designed to provide a rich graphics and multimedia architecture. Graphics support includes paths, rotation, gradient fills, anti-aliasing, outline fonts and transparency. The new graphics system is designed to support screen sizes up to 32,000 by 32,000 pixels. Multimedia support includes playback of industry-standard audio and video including ADPCM/PCM, MP3, MPEG1 and MPEG4 designed to enable licensees and software developers to more easily build media-based applications. This extensible multimedia framework is designed to enable licensees and software developers to easily add additional audio and video standards.

• Improved PIM Applications & Databases.Palm OS Address Book and Date Book are redesigned to support up to 255 fields, providing better interoperability with Microsoft Outlook. Each standard PIM application is designed to automatically adjust layout size to fit particular actions. For example, a small screen for the Dynamic Input Area when editing a document, and a larger screen when reading an eBook. Palm OS licensees and software developers can also extend and customize underlying schema databases easily to create new fields.

• Better compatibility with Microsoft Outlook and PC files. PalmSource has also added additional fields to Palm OS DateBook and Address Book, designed to correspond more closely to the information stored on Microsoft Outlook. In addition, Palm OS Cobalt is designed to allow users to transfer PC files directly to Palm Powered devices by dragging them onto an icon on the PC desktop, making it even easier for reading and editing.

• Compatibility with existing Palm OS software. Palm OS Cobalt includes a software emulator, designed to enable software programs created for earlier versions of Palm OS to run on Palm OS Cobalt Palm Powered mobile devices.

About PalmSource
PalmSource, Inc. is the company behind Palm OS, a leading operating system powering mobile information devices. Approximately 30 million Palm Powered handhelds and smartphones have been sold to date worldwide. Industry leaders Aceeca, AlphaSmart, Fossil, Founder Technology, 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 athttps://www.palmsource.com, http://www.palmsource.co.uk, http://www.palmsource.fr,http://www.palmsource.de and https://www.palmsource.com.cn.

Palm OS is a registered trademark and Palm Powered is a trademark of Palm Trademark Holding Company, LLC. Other brands may be trademarks of their respective owners.

"With the release of Palm OS Cobalt, we believe that PalmSource has firmly ushered us into the 'post-pc' age," said Alexis Hinds CEO, Blue Nomad. "The new multitasking, multimedia, and security APIs reaffirm PalmSource's leadership position in the mobile space, and will enable developers to deliver very rich applications to users clamoring for more sophisticated productivity and entertainment applications for Palm Powered handhelds and smartphones."

"Electric Pocket is excited about the new multimedia support in Palm OS Cobalt, which will enable us to offer advanced video messaging via our Pixer MMS solution for Palm Powered handhelds and smartphones," said Steve Bennett, chief executive officer, Electric Pocket Limited. Wireless carriers demand stability and leading edge capabilities, and we're confident that Palm OS can give us the best of both worlds.

"Our long-term faith in the Palm OS platform is reinforced by the PalmSource commitment to providing a true modern operating system with multithreaded and multitasking in Palm OS Cobalt," said August Grasis III, CEO of Handmark. "Together with the new extensible multimedia framework Handmark applications will deliver new features and richer user experiences."

"The powerful processors and rich audio and video capabilities of today's Palm Powered devices make them ideal portable entertainment devices for multimedia," said Brian Hall, president and CEO of Mark/Space, Inc. "The Missing Sync for Palm OS Cobalt from Mark/Space provides a simple and fast means to transfer music, audio and photos between a handheld and iPhoto or iTunes on a Mac."

"I view Palm OS Cobalt as a watershed event in the growth of the Palm OS platform as it incorporates two technologies that will be vitally important for the enterprise: flexible, schema-based databases and a truly robust security system," said C.E. Steuart Dewar, CEO of Pimlico Software, Inc. "With these technologies in place, developers like Pimlico Software will be able to develop even more powerful applications, which in turn will secure the dominant position of the Palm OS platform in the mobile market."

"As a leading application developer for the Palm OS platform, we are very excited about OS Cobalt and are committed to leveraging many of its unique capabilities," said John Chaffee, president of SplashData. "The Pluggable Encryption Security Architecture will provide industry-standard security services for our apps that store sensitive information, such as SplashID and SplashMoney. And the extensible multimedia framework will enable us to easily broaden support for additional media formats in our leading image viewer, SplashPhoto."

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 the Palm OS Cobalt, Palm OS Garnet, Palm OS developer tools, third party software, and the communications, enterprise, education, entertainment and smartphone markets. 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 Cobalt to enable the creation of new categories of devices tailored to meet the needs of advanced enterprise and entertainment markets, to maintain software compatibility and improve compatibility with Microsoft Windows and provide a stable, scalable platform with a wide range of adequately functioning security options; our to complete the development of Palm OS Garnet in a timely manner, the ability of Palm OS to promote the anticipated benefits and results including the acceleration of the development of mainstream Palm Powered handhelds smartphones; the ability of Palm OS Cobalt and Palm OS Garnet to maintain the flexibility, ease of use an compatibility that are the hallmarks of the Palm OS platform; acceptance and use of the new features of Palm OS Cobalt and Palm OS Garnet (e.g., industry standards-based security, multitasking, multithreading, memory protection, support for more memory and larger screens, extensible communication and multimedia frameworks) by our licensees as well as the ability of these features and functions to provide their anticipated results and benefits; the ability of the developer tools to provide software developers with an easier and faster path toward creating Palm OS applications of higher performance wireless, entertainment and enterprise-grade applications for Palm OS Cobalt and Palm OS Garnet, as well as use of the tools and acceptance of Palm OS Cobalt and Palm OS Garnet by the Palm OS developer community; the occurrence of software errors or defects in Palm OS Cobalt, Palm OS Garnet, and the developer tools; the ability of third party software incorporated in or utilized with Palm OS Cobalt, Palm OS Garnet, and the developer tools to perform as specified and provided the anticipated results and benefits; the ability of PalmSource to benefit from any growth in the communications, enterprise, education entertainment, and 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 Quarterly Report on Form 10-Q for the period ended August 29, 2003 and November 28, 2003. 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.