Press Release

PalmSource Licenses Palm OS to QTech

New Licensee to Create Palm Powered Smartphones and Mobile Solutions for the Indian and Latin American Markets

SUNNYVALE, Calif., July 28, 2004 — PalmSource, Inc. (NASDAQ: PSRC) provider of Palm OS™, a leading operating system powering next generation mobile devices and smartphones, and QTech, Inc., today announced QTech has licensed Palm OS to bring next generation Palm Powered™ smartphones and mobile solutions to the Indian and Latin American markets.

QTech is a technology company based in India focused on the development of smartphones and vertical solutions for the enterprise, government and high-end consumer markets. QTech aims to make Palm Powered smartphones a central part of its core business by partnering with leading mobile operators in India and Latin America.

"We are pleased to partner with PalmSource to leverage the power and flexibility of the Palm OS platform to bring next generation Palm Powered smartphones and applications to market," said Rao Machiraju, chairman and CEO of QTech. "In addition, tapping into the large and diverse community of Palm OS developers will enable our company to tailor mobile products with unique solutions aimed at its target markets."

"QTech is an ideal partner for PalmSource to broaden the reach of Palm Powered mobile products into India and Latin America," said David Nagel, president and CEO of PalmSource. "We believe QTech's technical expertise combined with PalmSource's commitment to create the best platform for mobile devices will foster growth of the Palm Powered Economy in these emerging markets."

"Consumer and Trade in India have been looking for additional products and applications in the tech featured mobile handset market which is poised for exponential growth, " said Pankaj Mohindroo, National President, Indian Cellular Association. "We are pleased to learn that PalmSource has licensed Palm OS to QTech to enter into India."

India is one of the fastest growing wireless markets with cellular connections predicted to grow to 56 million by the end of 2004, and reach 130 million by 2008¹. This growth can be attributed to the removal of regulatory hurdles for CDMA-based mobile services, the adoption of a unified telecom license to enable fully mobile services, the reduction in pricing of cellular services and the growing availability of a wide range of handsets at different price points. Latin American mobile markets are also growing very rapidly, with a forecast of 160 million subscribers by 2005².

About QTech
QTech Inc. is a Delaware corporation with offices in India, Brazil and the U.S. Through strategic partnerships, QTech is developing next generation smartphones and vertical applications for the enterprise, government and high-end consumer markets in emerging global sectors. QTech's core management team and advisory board have extensive experience and a proven track record of growing companies, technology creation and development in the handheld and mobile communications space. For more information, please visit www.qtechinc.com.

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, Founder Technology, Garmin, GSPDA, 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, PalmSource and Palm Powered are trademarks of Palm Trademark Holding Company, LLC.

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 QTech's plans for Palm Powered smartphones and mobile solutions; QTech's plans to partner with leading mobile operators in India and Latin America; and the wireless markets in India and mobile markets in Latin America. 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 QTech to enter into one or more distribution agreements with Palm OS original device manufacturers or Palm OS original equipment manufactures to distribute Palm Powered smartphones and mobile solutions in India and Latin America that meet the demands of QTech's target markets and which are accepted by end users; QTech's ability to successfully execute under such distribution agreements; the ability of QTech to secure and maintain adequate capital sufficient to fund its plans to bring Palm Powered smartphones and mobile solutions to its target markets; QTech's ability to successfully partner with mobile operators in India and Latin America; realization of the anticipated growth in the wireless and mobile markets in India and Latin America; our ability to maintain and grow the Palm OS developer community; our ability to benefit from any growth in the smartphone and mobile device markets; our ability to maintain and grow our developer community; 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 Gartner "India's Mobile Growth Story Continues," Desai, Foong, Liang, Dec 2003.
² IDC research study, 2003.