PalmSource is acquiring Linux developer for mobile devices, China MobileSoft.

PalmSource said it will "issue approximately 1,570,000 shares of PalmSource common stock in exchange for the outstanding equity and rights to acquire equity in CMS."

The acquisition will give PalmSource a large footprint in the growing Chinese market for mobile devices and content, according to David Nagel, president and CEO of PalmSource.

PalmSource will re-create the PalmSource user interface, software development frameworks based on the Palm OS and BeOS, and applications on top of an open distribution of the Linux kernel.

The applications will run in a proprietary software layer above the OS, according to Michael Mace, chief competitive officer.

CMS is developing a version of Linux for mobile devices, Mace confirmed.

"We intend that our layer will be portable to other implementations of Linux," Mace said.

The Linux-based OS will not replace the current Cobalt or Garnet operating systems. In addition to opening up markets like China that are increasingly Linux-friendly, however, the open source OS offers a number of other advantages to PalmSource, according to Mace.

Where Apple leads

Just as Apple's move to open source Unix has widened its developer community, PalmSource anticipates that Linux will give the company a huge base of developers. There are already thousands of device drivers available for Linux.

"Most companies do their initial testing of new hardware components on Linux first. So if we offer a Linux-compatible version of the OS, it should be easier for licensees to adopt components because testing has been done," Mace said.

Application compatibility between the two operating systems is being addressed by a set of APIs dubbed Protein. If a developer writes to the Protein APIs, an application will run on both Cobalt and a future Linux OS.

If a developer wants to write to the older 68000 processor devices, PalmSource will offer an emulation layer similar to the one used now to run older applications on the Cobalt- and Garnet-based mobile devices.

Mace said it could not say when licensees will ship products with the PalmSource Linux OS.