PalmSource Reports Profitable QuarterPalmSource Reports Profitable Quarter

Palm OS developer PalmSource Wednesday reported a profitable quarter on increased sales compared to the same quarter a year ago.

The company reported sales of $19.2 million for the quarter ending on November 16 compared to $16.8 million for the same quarter a year ago. It said that about 1.2 million devices using the Palm OS shipped in the quarter, with about 30 percent of those devices being smartphones. The palmOne Treo is, by far, the largest-selling smartphone based on the Palm OS and an updated version of that device, the Treo 650, shipped during the quarter.

The company reported a net income of about $2.1 million for the quarter compared to a loss of about $9.1 million for the same quarter a year ago. In a statement, PalmSource CEO David Nagel said that he wasn't satisfied with the company's financial performance, but was encouraged by the increased number of smartphone units that shipped.

"Although we generally performed to our financial expectations during the second quarter, we are not satisfied with this performance," Nagel said. "However, we did see some encouraging signs for our future, as in aggregate, our licensees reported shipping the largest number of Palm Powered smartphones for any quarter, and we continued to see a larger portion of our business come from that category."

The Palm OS has seen declining market penetration in recent quarters and the company recently announced that it will develop a Linux version of the operating system in an attempt to reverse that trend.